Financial Stability Oversight Council Improvement Act of 2025

This bill amends the Financial Stability Act of 2010, mandating that the Financial Stability Oversight Council (FSOC) must explore alternative solutions before it can designate a U.S. nonbank financial company for supervision by the Board of Governors of the Federal Reserve System. Specifically, before voting on such a designation, the FSOC must first consult with the company and its primary regulator. During this consultation, the Council must determine that other actions, such as applying new or heightened standards, or a written plan from the company, are impracticable or insufficient to mitigate any potential threat to the financial stability of the United States. This ensures a thorough evaluation of less intrusive measures prior to imposing Federal Reserve oversight.