This bill requires the Federal Reserve to create clear, public rules about how it conducts stress tests on large banks and financial companies. Think of stress tests as practice drills where regulators see how well banks would survive a financial crisis by running them through worst-case scenarios.

Right now, the Federal Reserve has a lot of flexibility in how it designs these tests, what assumptions it uses, and how it calculates the results. This bill says the Fed must publish its exact methods, models, and formulas within 90 days so banks and the public know exactly how the tests work. It also requires the Fed to announce the specific crisis scenarios it will test at least 60 days before running the tests, giving banks and investors time to prepare and understand what's being evaluated.

The bill also prevents the Fed from using stress tests to evaluate climate-related risks, limiting the scope of what these tests can measure. Additionally, it requires an independent audit every three years to check whether these stress tests are actually effective at protecting the financial system and keeping banks safe. The goal is to make the process more transparent and accountable while preventing the Fed from counting the same risk twice when calculating how much money banks need to hold in reserve.