Least Cost Exception Act
Congress bill would let FDIC avoid selling failed banks to the biggest banks, even if it costs more
Legislative Progress
Key Points
- This bill would let the FDIC pick a bank-failure solution that is not the absolute cheapest for the insurance fund, if it helps avoid more power ending up in the biggest “systemically important” banks.
- The FDIC could only use this option if the FDIC and the Federal Reserve (after talking with Treasury) decide the extra risk to the deposit insurance fund is worth the benefit of reducing banking system concentration.
- The FDIC would have to set, by rule within 1 year, a cap on how much of the deposit insurance fund’s net worth can be used for these higher-cost decisions.
- If the chosen option costs more than the cheapest option, the buyer would have to pay the difference back to the deposit insurance fund through an assessment paid over at least 5 years.
- Within 30 days of using this option, the FDIC would have to report to Congress explaining how much more it cost than the cheapest alternative and why it was chosen.
Impact Analysis
Govbase has not yet run an impact analysis on this legislation.
Milestones
Placed on the Union Calendar, Calendar No. 405.
The bill is now on the schedule for the full chamber to consider. It's in line for debate and a vote.
Reported (Amended) by the Committee on Financial Services. H. Rept. 119-474.
Ordered to be Reported (Amended) by the Yeas and Nays: 50 - 0.
The committee approved this bill and is sending it to the full chamber for a vote. This is a significant step — most bills never get this far.
Committee Consideration and Mark-up Session Held
Committee Consideration and Mark-up Session Held
Votes
No votes have been recorded for this legislation yet.
Source Information
Document Type
Congressional Bill
Official Title
Least Cost Exception Act
Data Sources
Sponsor
Cosponsors
(4)Analysis generated by AI. Always verify with official sources.