Central South Dakota News

WASHINGTON - U.S. Senators Mike Rounds (R-S.D.) and Kyrsten Sinema (I-Ariz.) have introduced legislation aimed at increasing transparency and accountability within the Financial Stability Oversight Council (FSOC). The FSOC Improvement Act seeks to enhance the transparency and fairness of the systemically important financial institutions (SIFI) designation process.

The proposed legislation would codify the 2019 guidance that requires the FSOC to assess whether systemic risks can be addressed through means other than designating a financial institution as a SIFI. It would also mandate consultation with the primary regulator and the company on alternative measures to address potential threats to financial stability. Furthermore, the legislation aims to improve transparency at the FSOC by requiring the council and its member agencies to report on crisis planning activities and potential threats.

Senator Rounds emphasizes the importance of the FSOC Improvement Act, stating, "I believe the FSOC Improvement Act is a crucial step towards enhancing the effectiveness and transparency of our financial regulatory system. SIFI designation can impose significant regulatory burdens on individual companies. By allowing institutions to modify their business, structure, or operations before receiving the SIFI designation, we can create a more resilient financial environment for the American people, fostering economic growth and stability."

Meanwhile, Senator Sinema highlights the benefits of the legislation for Arizona, saying, "We're fueling growth and creating careers for Arizonans while increasing transparency."

This is not the first time Senator Rounds has introduced the FSOC Improvement Act. He initially introduced the legislation in 2018 during the 115th Congress and reintroduced it to the 116th Congress in 2019, with Senator Sinema as an original cosponsor.

The full text of the bill can be accessed [here](link to the bill text).

The FSOC Improvement Act aims to bring greater transparency and accountability to financial regulators, specifically in the designation of systemically important financial institutions. With the proposed legislation, Senators Rounds and Sinema seek to ensure that potential threats to financial stability are addressed in a fair and transparent manner, while also allowing affected institutions the opportunity to modify their operations before receiving the SIFI designation. By doing so, they hope to foster economic growth and stability for the American people.