Chief Risk Officer Enforcement and Accountability Act
Chief Risk Officer Enforcement and Accountability Act
Plain Language Summary
# Chief Risk Officer Enforcement and Accountability Act - Summary **What the bill does:** This bill would require more large financial companies to have a "chief risk officer" — an executive responsible for identifying and managing financial risks — and a risk committee to oversee these practices. Currently, only publicly traded large bank holding companies are required to have these positions. The bill would expand this requirement to privately owned large banks and bank holding companies, closing a regulatory gap. It also requires companies to notify banking regulators within 24 hours if a chief risk officer position becomes vacant. **Who it affects:** The bill primarily affects large private banks and bank holding companies that are not currently required to have chief risk officers.
It also impacts banking regulators who would receive notifications about vacant positions. Indirectly, it could affect bank customers and the financial system by strengthening risk management oversight at institutions that weren't previously subject to this requirement. **Current status:** The bill (HR 1910) was introduced in the 119th Congress by Representative Sean Casten (D-IL) and is currently in committee, meaning it has not yet been voted on by the full House. No further action has been taken.
CRS Official Summary
Chief Risk Officer Enforcement and Accountability Act This bill expands which financial companies must establish a risk committee and appoint a chief risk officer and provides statutory authority for requiring large bank holding companies to appoint a chief risk officer. Chief risk officers are responsible for the establishment of risk limits, monitoring compliance, and reporting any deficiencies to the risk committee. Risk committees are responsible for the oversight of the risk management practices of the entire company.Currently, large bank holding companies that are publicly traded are required to establish risk committees and, by regulation, have chief risk officers. Under the bill, risk committees and chief risk officers are also required for (1) privately held large bank holding companies, and (2) large banks that do not have a holding company. Additionally, the bill requires companies to notify regulators if the chief risk officer position is vacant within 24 hours of when the vacancy occurs. If the vacancy lasts 60 days or more, the company’s assets are capped at the amount held at the time the vacancy occurred. Further, the bill allows the Federal Reserve Board to require smaller bank holding companies to establish a risk committee and appoint a chief risk officer. Currently, the board is allowed to require smaller bank companies that are publicly traded to establish risk committees.
Latest Action
Referred to the House Committee on Financial Services.