Congressman Scott Garrett

Representing the 5th District of New Jersey

Huizenga, Garrett Release Major Fed Reform Legislation Including Pathway to Audit the Fed

Jul 8, 2014
Press Release

Washington, DC – Today, Monetary Policy and Trade Subcommittee Vice Chairman Bill Huizenga (MI-02) and Capital Markets and Government Sponsored Enterprises Subcommittee Chairman Scott Garrett (NJ-05) announced the introduction of H.R. 5018, the Federal Reserve Accountability and Transparency (FRAT) Act.  

"Over the past several years, the Federal Reserve has gained unprecedented power, influence, and control over the financial system while remaining shrouded in mystery to the American people," said Huizenga. "H.R. 5018 lifts this veil of secrecy by increasing accountability and transparency by limiting Fed officials 'blackout periods' to discuss policy with Congress, opening the rulemaking process, and requiring the Fed to provide a cost-benefit analysis for every regulation it issues.  Additionally, this legislation urges the Fed to adopt a 'rules-based' approach to monetary policy instead of the continued improvisation strategy currently being employed.  Should the Fed fail to adopt a 'rules-based' approach, it would trigger an audit of the Fed's books."

“Despite setting regulatory policies that impact millions of Americans, the Federal Reserve--by and large--operates in secret,” said Garrett after the bill's introduction in the House.  “Congress is all that stands between the central bank's exercise of power over the financial system and the American people.  So it is vital to ensure that the Fed is accountable to the people's representatives.  I'm proud to support Rep. Huizenga's commonsense bill, and look forward to its swift passage.”

The bill requires the Federal Reserve to conduct cost-benefit analysis when it adopts new rules. The bill enhances the Federal Reserve’s accountability to Congress in the conduct of regulatory policy and requires transparency about the Federal Reserve’s bank stress tests and about international financial regulatory negotiations conducted by the Federal Reserve, the Treasury Department, and the Federal Deposit Insurance Corporation. The legislation further requires the Federal Reserve to disclose the salaries of highly paid employees and requires those employees to abide by the same ethical requirements as other federal financial regulators.

Text of H.R. 5018 can be found here and a section by section analysis of the legislation is available here.

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