Stress Testing Accountability and Transparency Act

Key Points

• This bill changes how the Federal Reserve checks if big banks are healthy enough to survive a financial crisis. It requires the Fed to be more open about the math and formulas they use to grade these banks.
• The Fed would have to tell the public exactly what kind of economic scenarios they are testing at least 60 days before the tests start. This gives banks and the public more time to see what the government is looking for.
• A major part of the bill stops the Fed from using these tests to look at climate change risks. The bill says the Fed cannot use its current authority to force banks to undergo climate-related stress tests.
• The bill also prevents the government from double-counting risks. This means banks would not have to set aside extra cash twice for the same potential problem, which could make it easier for them to lend money.
• Every three years, a government watchdog would study these tests to see if they are actually keeping the banking system safe and report those findings to Congress.

Impact Analysis

Govbase has not yet run an impact analysis on this legislation.