# 119-s-3734: Close the Shadow Banking Loophole Act

119-s-3734, Close the Shadow Banking Loophole Act, is a 119th Congress bill sponsored by Sen. Kennedy, John [R-LA] (R-LA); status introduced; PRIA reads it as touching household money (as of 2026-04-21).

- Canonical: https://policyrisk.com/legislation/119-s-3734
- As of: 2026-04-21
- Plain-text twin of the page above; the HTML and this file carry the same facts.

## Facts
- Bill: 119-s-3734
- Congress: 119
- Title: Close the Shadow Banking Loophole Act
- Status: introduced
- Introduced: 2026-01-29
- Sponsor: Sen. Kennedy, John [R-LA] (R-LA)
- Cosponsors: 1
- Policy area: Finance and Financial Sector
- Touches household money: yes
- Last recorded action: 2026-04-21

## Summary

**Tightens FDIC oversight of industrial banks and their parent companies.** The bill would give the FDIC authority to examine parent companies and nonbank subsidiaries, impose conditions to promote safety and soundness, tighten deposit insurance approvals, and create a change‑of‑control regime for industrial banks. - Industrial loan companies and their parent firms would face new supervision. The FDIC could require reports, tailored examinations, and enforce conditions on parents and nonbank affiliates. - Deposit insurance applications pending on Sept 23, 2021 would get a public 90-day comment period and a public hearing. Those applications could only be approved by a two-thirds vote of the FDIC Board and must be acted on by Sept 30, 2026 or be deemed denied. - Potential acquirers would face a stricter change-of-control process with general disapproval except for narrow exceptions. Exceptions include emergency rescues, passive stakes under 25 percent in listed issuers, and buyers already supervised as bank holding companies.

## Cosponsors (1)

- Sen. Kim, Andy [D-NJ] (D-NJ), 2026-01-29T00:00:00.000Z

## Provisions PRIA read

- Block most industrial bank takeovers: benefit, medium. This bill would require federal banking agencies to disapprove changes in control of industrial banks by default. Only a few narrow exceptions would be allowed. Exceptions include a buyer rescuing a bank the agency finds is in danger of default, a purchase that leaves the buyer with under 25% of an…
- Supervise industrial bank parent companies: benefit, medium. This bill would give a primary federal regulator authority to supervise parent companies of industrial loan companies whose FDIC insurance was approved after September 23, 2021. The primary agency would be the agency named under section 2 of the Dodd-Frank Act for the parent, or the FDIC if Dodd-Fr…
- Tighten pending FDIC bank approvals: benefit, medium. This bill would change FDIC rules for deposit insurance applications filed on or before September 23, 2021 that are still pending at enactment. For those pending applications, the FDIC would provide a 90-day public comment period and hold a public hearing. The FDIC could approve those applications…

## Related bills

- 119-s-1748: Kids Online Safety Act
- 119-s-3257: John A. Hauser Mental Health in Aviation Act
- 119-s-3940: Access to Fair Financing for Opportunity and Resilient Development Act
- 119-s-3524: American Battlefield Protection Program Amendments Act of 2025
- 119-s-1552: Living Donor Protection Act of 2025
- 119-s-1241: Sanctioning Russia Act of 2025

## Sources
- [119-s-3734 on Congress.gov](https://www.congress.gov/bill/119th-congress/senate-bill/3734)

## Related
- [119-s-1748: Kids Online Safety Act](https://policyrisk.com/legislation/119-s-1748)
- [119-s-3257: John A. Hauser Mental Health in Aviation Act](https://policyrisk.com/legislation/119-s-3257)
- [119-s-3940: Access to Fair Financing for Opportunity and Resilient Development Act](https://policyrisk.com/legislation/119-s-3940)
- [119-s-3524: American Battlefield Protection Program Amendments Act of 2025](https://policyrisk.com/legislation/119-s-3524)
- [119-s-1552: Living Donor Protection Act of 2025](https://policyrisk.com/legislation/119-s-1552)
- [119-s-1241: Sanctioning Russia Act of 2025](https://policyrisk.com/legislation/119-s-1241)
- [All bills in Congress](https://policyrisk.com/legislation)

Source: PRIA, https://policyrisk.com/legislation/119-s-3734 (as of 2026-04-21).