Financial Stability Oversight Council Improvement Act of 2025

This bill amends the Financial Stability Oversight Council's (FSOC) process for addressing threats posed by nonbank financial companies. It requires the FSOC to first determine, in consultation with the company and its primary regulator, that alternative actions (like new safeguards or company plans) are impractical or insufficient before voting on a formal determination. The key change adds a new step (paragraph (3)) to Section 113 of the 2010 Financial Stability Act, directly affecting how the FSOC evaluates risks to U.S. financial stability. This applies specifically to U.S. nonbank financial companies under FSOC review.