Bringing the Discount Window into the 21st Century Act
The Bringing the Discount Window into the 21st Century Act would require the Board of Governors of the Federal Reserve System to conduct a formal, government-wide review of the Federal Reserve discount window—the Fed’s mechanism for providing liquidity to banks and other financial institutions during normal and stressed times. The review must assess how the discount window currently operates, including technology, cybersecurity, communications, operating hours, and interaction with other liquidity providers, and then the Board would develop and implement a remediation plan to address any deficiencies. The bill also sets up reporting and oversight requirements to Congress, with consultation from other federal financial regulators, and it would sunset (be repealed) once the remediation plan is fully implemented. In short, the bill aims to modernize and strengthen how the discount window works, improve access and transparency, and ensure the Fed can provide timely liquidity in a rapidly changing payments and technology environment.
Key Points
- 1Mandatory review of discount window operations: The Board must start within 60 days of enactment and complete the review within 240 days, evaluating liquidity effectiveness, technology and communications, cybersecurity, interagency coordination, operating hours, and the impact of mobile/instant communications on liquidity risk and access.
- 2Remediation plan: After the review, the Board must identify deficiencies and create a written plan with actions, timelines, milestones, and ongoing controls to implement improvements.
- 3Congressional reporting and consultation: Not later than 365 days after enactment, the Board must submit a report to Congress with findings and the remediation plan, after consulting the OCC, FDIC, and the Secretary of the Treasury and allowing feedback from them; the Board's Chairman must testify at a semi-annual hearing.
- 4Annual oversight: The Board must provide an annual report on discount window effectiveness and progress on implementing enhancements; the Inspector General and the CFPB must also provide annual progress reports to Congress.
- 5Confidential information and sunset: Some information can be kept in a confidential annex if public disclosure could harm monetary policy, financial stability, cybersecurity, or bank stability; the provision would be repealed once the remediation plan is fully implemented and publicly reported as such.