Financial Stability Oversight Council Improvement Act of 2025

Floor Speech

Mr. Speaker, I rise in support of H.R. 3682, the Financial Stability Oversight Council Improvement Act of 2025, sponsored by Representative Foster.

Let me start by thanking the bill sponsor and our ranking member for our Financial Institutions Subcommittee for his leadership on these matters.

Representative Foster has helped raise the alarm regarding the financial stability threats posed by the AI boom. He has introduced additional bills that would strengthen our financial stability, including one to reverse Trump's dangerous budget and staffing cuts to the Financial Stability Oversight Council and Office of Financial Research.

Mr. Foster introduced another bill to close a regulatory gap to oversee third-party vendors used by credit unions and the GSEs. I know Republicans have some concerns with the former, but the latter bill has bipartisan support in the Senate and is timely. Given how our community financial institutions increasingly rely on these vendors, helping them access technology to compete, the least we can do is ensure that there is good oversight to address vulnerabilities like cybersecurity threats.

Turning to this bill, H.R. 3682, let's step back and remember why we have a Financial Stability Oversight Council in the first place. Congress established FSOC following the 2008 global financial crisis to close regulatory gaps and enhance oversight of large, nonbank financial firms like AIG or Lehman Brothers that can pose a threat to our financial stability.

Congress gave FSOC various tools, including the power to designate a large nonbank company as a systemically important financial institution for enhanced oversight and regulation. In Trump's first term, they severely weakened the nonbank designation process. In a letter, former Treasury Secretaries Geithner, Lew, and Yellen, along with former Fed Chair Bernanke, warned: ``These changes would make it impossible to prevent the build-up of risk in financial institutions whose failure would threaten the stability of the system as a whole.''

Biden's FSOC addressed these concerns and improved procedures for designations, while importantly ensuring there is due process and opportunities to consider alternatives to designation that might better mitigate systemic risks. They also made clear that the Council should not prioritize designation over other options.

Mr. Foster will make sure that FSOC gives a company and its primary regulators an opportunity to present alternatives to be promptly considered by the Council; otherwise, they may proceed and follow the regular procedures to designate a firm if need be.

The bill also allows FSOC to revise and waive these considerations if doing so would promote financial stability. Given all of that, Mr. Speaker, I will support H.R. 3682, and I reserve the balance of my time.

Mr. Speaker, at a time when threats to our financial stability are growing, Congress should be doing more to address these concerns, including closing oversight gaps regarding third-party vendors, advancing deposit insurance reform and, yes, holding the President accountable for all of the ways his corruption and chaos erodes trust and stability.

Again, I thank Representative Foster for his leadership on promoting financial stability. I also appreciate the way he improved this bill, which I will support, and I yield back the balance of my time.

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