The House Financial Services Committee on Wednesday passed HR 3996, which aims to put an end to financial firms considered too big to fail and prevent future taxpayer-funded bailouts by requiring institutions to pay into a "dissolution fund." The news came as Bank of America (BAC), embodying a growing sense of accountability among the US and other leading nations, revealed plans to repay government bailout funds. HR 3396, the Improving Financial Stability and Enhancing Prudential Regulation, passed the key House panel by a 31 to 27 vote, according to an e-mailed statement from the Committee. It's the ninth bill approved by the panel this year that overhauls financial regulation. The bill will create an inter-agency oversight council to identify systemically risky firms and subject them to increased scrutiny and regulation. HR 3396 will set up an "orderly process" to dismantle large, interconnected and failing financial firms in a way that minimizes the impact on the financial system and avoids another taxpayer-funded bailout, the Committee said in the statement Wednesday. The bill aims to hold financial industry and shareholders responsible for the cost of firms' failures. Any costs related to the dismantling of a failing firm will be repaid first out of the assets of the failed firm at the shareholders' and creditors' expense. Any remaining costs would come out of a "dissolution fund" pre-funded by institutions with more than $50bn of assets and hedge funds with more than $10bn of assets, according to a summary of the bill (available to download here). The bill would grant the Federal Reserve authority to regulate systemically risky firms, enhance Government Accountability Office's authority to examine the Board of Governors of the Federal Reserve as well as the Federal Reserve banks. The bill also folds the Office of Thrift Supervision and Office of the Comptroller of the Currency into one. The bill would impose a 5% credit risk retention on lenders for loans that are transferred, sold or securitized. The Committee's move to end taxpayer-funded bailouts comes as Bank of America plans to repay the full $45bn of taxpayer funds received through the Troubled Asset Relief Program (TARP). "We appreciate the critical role that the US government played last fall in helping to stabilize financial markets, and we are pleased to be able to fully repay the investment, with interest," said CEO and president Kenneth Lewis in a statement Wednesday. BofA's move to repay government funds mirrors a migration toward less government funding in distressed financial markets. Following the collaboration of leading industrial nations at the G20 meeting in Pittsburgh, the Economic and Financial Affairs Council of theĀ  European Union (EU) will begin scaling back its government-backed state aid to strongly capitalized financial institutions. The G20 meeting was largely seen as a time when major industrial nations hammered out a global consensus on the future of dealing with economic crises. Leading nations appear to be pushing accountancy toward a universal standard. Write to Diana Golobay.