Bringing the Discount Window Into the 21st Century Act

Floor Speech

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Mr. FOSTER. Mr. Speaker, I rise in support of this legislation, which requires the Federal Reserve to conduct a comprehensive review of discount window operations, including its technological infrastructure, cybersecurity, communications, real-time monitoring, and oversight mechanisms across the Federal Reserve System.

In 2023, we witnessed the most significant banking turmoil since the global financial crisis. During that period, record numbers of institutions turned to the discount window, borrowing at unprecedented levels with more than $150 billion borrowed during the peak period.

The system held in large part because of the reforms and regulatory tools provided and implemented as part of the Dodd-Frank Act, but it came under stress.

I also appreciate the willingness of the legislation's sponsor to accept my amendment during the Financial Services Committee markup of this legislation. With my amendment, this bill recognizes that bank runs will now move at the speed of mobile online banking and instant communications. Soon, they will move at the speed of agentic AI.

The bank failures of 2023 showed that liquidity pressures can escalate in hours, not days, a speed that will only intensify with the rise of artificial intelligence and autonomous financial agents.

This legislation will require the Federal Reserve Board to develop a written plan to remedy deficiencies like those to be identified during the review process. This review and remediation will lead to more accessible, responsive, and secure discount window operations.

Mr. Speaker, I encourage my colleagues to support this bill.

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