Long Island, NY - January 31, 2018 - Congressman Lee Zeldin (R, NY-1), member of the House Financial Services Committee, just issued the following statement after his bipartisan bill, the Financial Institution Living Will Improvement Act (H.R. 4292), passed the House this afternoon by a vote of 414-0:
“A living will is an important tool that ensures financial institutions have a plan to wind down their assets during an economic crisis or credit crunch in order to protect their customers and the American taxpayer from being on the hook for another bank bailout.
“Unfortunately, under current law, the standards that determine the approval of a financial institution’s living will are inconsistent, secretive and not publically available. The important bipartisan reforms in this bill require the standards be made public and regulators give needed feedback within 6 months. This allows financial institutions to more easily have their living wills approved by regulators, such as the FDIC and Federal Reserve.
“This may sound like wonky financial policy, but to a person on Long Island trying to get a small business loan or mortgage, improving the living wills process ensures the community banks they rely on can focus on lending to their customers instead of wasting their resources complying with an arbitrary set of confusing regulations.
“I thank my colleagues from across the aisle, especially Congresswoman Carolyn Maloney, for her leadership on this important legislation. Bipartisan reforms are essential, and working together we can unleash financial capital, increase economic opportunity and help all Americans attain the American dream.”
Congresswoman Carolyn Maloney (D, NY-12), who joined Congressman Zeldin in introducing this legislation said, “This bill strengthens and improves the living wills process by implementing three common-sense reforms that were recommended by the GAO. The bill ensures that the banking regulators have enough time to properly evaluate financial institutions, living wills, and that financial institutions have enough time to incorporate feedback from the regulators -- which will dramatically improve our financial crisis management capabilities by making it easier to wind down the next Lehman Brothers or AIG."
The Financial Institution Living Will Improvements Act of 2017 (H.R. 4292) amends Title I of the “Dodd-Frank Wall Street Reform and Consumer Protection Act” to reform the “living will” resolution plan submission process. The bill restricts the Federal Reserve Board and FDIC from requiring bank holding companies to submit a “living will” resolution plan more than every two years. This bill requires the Federal Reserve and FDIC to provide feedback to a submitted resolution plan within six months after a bank holding company submits. This bill also requires the Federal Reserve and FDIC to publicly disclose the assessment framework used to review the adequacy of resolution plans. The bill previously passed the House Financial Services Committee, on November 15, 2017, by a vote of 60-0.