Demanding more openness at the Financial Stability Oversight Council and changes to how it designates systemically important financial institutions, the House Financial Services Committee this week advanced a slate of reform-minded bills.

Notably, the FSOC Improvement Act, H.R. 1550, requires greater transparency at the multi-regulator council and allows companies to take steps to eliminate risk through changes to their business model or another means before being designated as systemically important. Non-bank entities would only be tagged as systemically important if their systemic risk cannot otherwise be reduced by working with their primary regulator.

The Council would be required to vote on whether to remove a company’s designation every five years. At that time, the company would also be allowed to present FSOC with a plan on how it could de-risk and shed its SIFI designation by changing its business structure or practices. The Financial Services Committee approved the bill by a vote of 44-12.

Other bills that now advance to a vote in the full House of Representatives include:

H.R. 1309, Systemic Risk Designation Improvement Act

It would more closely base the regulation of financial institutions “on risk rather than on arbitrary asset size.” The Financial Services Committee approved the bill by a vote of 39-16.

H.R. 1478, Policyholder Protection Act

Prohibits federal banking regulators from moving the assets of state-regulated insurance companies, structured under larger financial firms, to a bank if the state insurance regulator determines the transfer would harm the status of the insurer. It was approved by a vote of 57-0.

H.R. 1660, Federal Savings Association Charter Flexibility Act

The bill allows a federal savings association to choose to operate under the supervision of the Office of the Comptroller of the Currency with the same rights and duties of a national bank. It was approved by voice vote.

H.R. 2209

It requires federal banking agencies to treat certain municipal securities that are liquid, readily marketable, and investment grade as of the calculation date as high-quality level 2A assets. It passed with a 56-1 vote.

H.R. 3340, Financial Stability Oversight Council Reform Act

It makes FSOC and the Office of Financial Research accountable to taxpayers by making both part of the regular congressional appropriations process. The bill also creates quarterly reporting requirements for the Office of Financial Research and requires OFR to provide at least a 90-day public notice and comment period before issuing any report, rule or regulation. It advanced with a 33-24 vote.

H.R. 3557, FSOC Transparency and Accountability Act

The bill makes FSOC subject to both the Government in Sunshine Act and the Federal Advisory Committee Act.  It allows all members of the commissions and boards represented on FSOC to attend and participate in FSOC meetings. It passed by a vote of 33-24.

Among those applauding the FSOC-related reforms is Investment Company Institute President and CEO Paul Schott Stevens. “Designation is not an end in itself,” he said in a statement. “FSOC’s goal should be to reduce systemic risk, not simply to designate ever more nonbank financial companies as SIFIs for the Federal Reserve to regulate. This bipartisan bill would enhance FSOC’s ability to mitigate systemic risk while also ensuring that nonbank SIFI designations are reserved for the limited cases where FSOC concludes that Federal Reserve oversight is more appropriate than alternative regulatory tools or action by the financial entity to address identified risks.”