24. Federal Reserve · Notable · Needs Congress
Limit the Fed's lender-of-last-resort function
Printed page 733 24. Federal Reserve
“Limit the Federal Reserve’s lender-of-last-resort function. … This function should be limited so that banks and other financial institutions behave more prudently, returning to their traditional role as conservative lenders rather than taking risks that are too large and lead to still another taxpayer bailout.”
What has happened
- Not started
Congress moved the other way. The Federal Reserve's lender-of-last-resort authority in section 13(3) of the Federal Reserve Act and its discount window lending under section 10B are unchanged, and the one Federal Reserve lending bill to pass a chamber would widen the function rather than limit it: the House passed H.R. 3390, the Bringing the Discount Window into the 21st Century Act, on February 9, 2026, requiring the Board to review discount window operations within 240 days and consider whether operating hours "should be expanded", whether the technology infrastructure supports "the timely provision of liquidity, including in times of financial stress", and how to ensure "consistent access to the discount window across the Federal Reserve System".
Research log
What was searched, and what didn’t count as evidence
Research notes
Leads, all in committee and none of them a limit on the lender-of-last-resort function: S. 1646 (Rein in the Federal Reserve Act), S. 1648 (Right-size the Federal Reserve Act) and S. 1647 (ROI of the Federal Reserve Act), all referred to Senate Banking 2025-05-07; S. 4585, the Discount Window Preparedness Act (referred 2026-05-20), which like H.R. 3390 improves rather than restricts access.
This item shares the Chapter 24 cluster negative search with #2011, #2012, #2016, #2024 and #2027; the search strings are in docs/research/ch-24.md.
- Action
- restrict
- Object
- Federal Reserve lender-of-last-resort (LOLR) function
- ID
- 2009