To amend the Federal Credit Union Act, the Federal Deposit Insurance Act, the Revised Statutes, and the Federal Reserve Act to require Federal banking agencies to consider economic growth when conducting supervisory functions.
Summary
H.R. 6838 aims to amend several key acts—the Federal Credit Union Act, the Federal Deposit Insurance Act, the Revised Statutes, and the Federal Reserve Act. The central change involves mandating federal banking agencies to consider economic growth alongside safety and soundness when conducting their supervisory functions. This proposed legislation seeks to broaden the scope of regulatory oversight to include a proactive consideration of economic expansion.
Expected Effects
The bill's passage would likely result in a shift in how federal banking agencies approach their supervisory roles. They would be required to weigh the potential impact of their decisions on economic growth, potentially leading to more lenient or growth-oriented regulatory practices. This could influence lending practices, investment strategies, and overall financial stability measures.
Potential Benefits
- Potentially stimulates economic growth by encouraging lending and investment.
- Could lead to increased job creation as businesses expand with easier access to capital.
- May foster innovation and entrepreneurship through a more supportive regulatory environment.
- Could result in a more dynamic and competitive financial sector.
- Might lead to greater financial inclusion by encouraging banks to serve underserved communities.
Most Benefited Areas:
Potential Disadvantages
- Could compromise the safety and soundness of financial institutions if economic growth is prioritized over risk management.
- May lead to increased financial instability and potential for future economic crises.
- Might create moral hazard if banks believe they will be bailed out for pursuing risky growth strategies.
- Could result in inflationary pressures if lending increases too rapidly.
- May exacerbate income inequality if the benefits of economic growth are not distributed equitably.
Most Disadvantaged Areas:
Constitutional Alignment
The bill appears to align with the Constitution's broad goals of promoting the general welfare, as stated in the Preamble. Congress has the power to regulate commerce and establish banking regulations under Article I, Section 8. However, the specific implementation and potential consequences would need to be carefully considered to ensure it doesn't infringe on other constitutional principles or create unintended economic instability.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).