The U.S. House of Representatives advanced Monday legislation that would mandate that the Federal Reserve Board appoints someone to testify before Congress in the absence of the vice chair of supervision.
The Dodd-Frank Act stated that the Fed’s vice chair of supervision should appear before Congress regularly to discuss supervisory issues. However, the first appointee to that position was only made last year, seven years after Dodd-Frank was passed into law.
The Federal Reserve Supervision Testimony Clarification Act (H.R. 4753), sponsored by Rep. Frank Lucas (R-OK), effectively puts a backup plan in place if the vice chair of supervision is not available.
“Dodd-Frank established the vice chair for supervision position to oversee those efforts, but the first confirmed appointee to that position took office only last year, a full seven years since Dodd-Frank,” Lucas said. “During that time, Congress received minimal testimony on regulatory issues from the Fed. Typically, other officials who don’t oversee regulatory efforts gave testimony in this regard. But the key point is Dodd-Frank requires only the vice chair for supervision to give that testimony. While we are grateful that other Fed officials decided to speak to Congress on regulatory issues, they didn’t have to under the law.”
Lucas said Congress gave the Federal Reserve much greater regulatory authority under Dodd-Frank, so it is critical that it hears from it on regulatory developments. It also helps promote greater transparency of government agencies, he added.
The bill now moves to the Senate floor for further consideration.