HR 3390: Bringing the Discount Window into the 21st Century Act

HR 3390 in plain English: This bill requires the Federal Reserve's Board of Governors to review its discount window lending program, which provides loans to banks to support their stability and liquidity, and to develop a plan to fix any identified problems. The remediation plan must set timelines and milestones, be approved by the board, and be reported to Congress annually.

Stated purpose

This bill requires the Federal Reserve to review its discount window lending program—which provides short-term loans to banks to help them stay stable—and create a plan to fix any problems found, with regular updates to Congress.

Key points

• Requires the Federal Reserve to review its discount window lending program for deficiencies
• Review must examine technology infrastructure, operating hours, and interactions with other liquidity providers
• Requires a remediation plan addressing any deficiencies, with timelines and milestones for fixes
• Mandates annual reports to Congress on the status of the remediation plan

Arguments supporters make

• The 2023 banking crisis showed that some banks could not access emergency Fed loans quickly enough, so modernizing the system could prevent future failures.
• Expanding operating hours and updating technology could help banks respond to rapid deposit withdrawals that now happen instantly through mobile banking apps.
• Requiring regular reports to Congress increases accountability and transparency over a critical but little-watched part of the financial system.

Arguments opponents make

• The bill only mandates a review and a plan—it does not require any actual changes—so it may produce reports without delivering real improvements.
• The Federal Reserve already has authority to review and upgrade its own operations, raising questions about whether a new law is necessary or just adds paperwork.
• Reducing stigma around discount window borrowing could encourage riskier bank behavior if institutions feel they can more easily rely on a government backstop.

Tradeoffs

Making emergency lending faster and easier could strengthen financial stability, but it may also reduce pressure on banks to manage their own liquidity carefully, shifting more risk to the public backstop. Increased congressional oversight improves accountability but could also create political pressure on a body that has traditionally operated with independence.

Current status in Congress: Passed House.

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