Discount Window Preparedness Act
Sens. Warner and Kennedy Introduce Bipartisan Bill to Require Regular Bank Liquidity Testing
The Discount Window Preparedness Act is currently in the early stages of the legislative process. It was recently sent to the Senate Committee on Banking, Housing, and Urban Affairs for review. There are no upcoming votes scheduled at this time.
Legislative Progress
The bill has strong bipartisan support from key members of the Senate Banking Committee and addresses recent concerns about bank stability, though it may face industry pushback over the frequency of testing.
Key Points
Impact Analysis
Personal Impact
Small business owners benefit indirectly because the bill makes it easier for their community banks to use small business loans as collateral when borrowing from the Fed. This strengthens the financial stability of the smaller banks that many small businesses rely on for credit, making it less likely that a bank liquidity crunch would cut off their access to loans.
“implementing simplified procedures for depository institutions to pledge small business loans as collateral for advances under this section, with emphasis on simplified documentation for smaller institutions”
Milestones
Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
Sent to a congressional committee for expert review. The committee decides whether this bill moves forward.
Introduced in Senate
The bill was officially filed and given a number. It now enters the legislative queue.
Votes
No votes have been recorded for this legislation yet.
Related News
3 articlesKennedy, Warner Introduce Bipartisan Legislation to Modernize the Federal Reserve Discount Window
Sens. John Kennedy and Mark Warner introduced the Discount Window Preparedness Act to reduce stigma and improve the Fed's liquidity tool. The bill mandates quarterly testing for banks with over $100B in assets and semi-annual testing for those with $10B-$100B to ensure emergency readiness.
Warner, Kennedy Introduce Discount Window Preparedness Act of 2026
The proposed legislation requires the Federal Reserve to modernize its discount window operations, including a secure online platform and extended hours. It also mandates that regulators give credit in liquidity evaluations to banks that successfully complete required borrowing tests.
Bipartisan Bill Aims to Prevent Future Bank Runs by Modernizing Fed Borrowing
Following the failures of Silicon Valley Bank and Signature Bank, a new bipartisan bill seeks to ensure banks are operationally ready to use the Fed's discount window. The act requires regular testing and system upgrades to handle the speed of modern, digital-age bank runs.
Source Information
Document Type
Congressional Bill
Official Title
Discount Window Preparedness Act
Data Sources
Sponsor
Cosponsors
(1)Analysis generated by AI. Always verify with official sources.