A bipartisan group of senators, led by U.S. Sens. Thom Tillis (R-NC) and Elizabeth Warren (D-MA), introduced legislation that would strengthen Federal Reserve accountability and ensure that financial regulators are responsive to Congressional information requests.
The bipartisan Financial Regulators Transparency Act would ensure, among other things, that Congress receives the information necessary to fully evaluate the recent collapses of Silicon Valley Bank (SVB) and Signature Bank.
Specifically, the bill would subject the regional Federal Reserve Banks to the Freedom of Information Act (FOIA) so that they would respond to congressional information requests. It would also make the Inspector General of the Federal Reserve a presidential appointee, aligning it with other agencies. In addition, it would prohibit financial regulatory agencies from denying congressional requests for ethics-related information.
Also, it would provide select members of the Senate Committee on Banking, Housing, and Urban Affairs and the House Financial Services Committee with the right to request supervisory information from the Federal Reserve.
“Congress must have a clear understanding of what regulatory and supervisory failures occurred to allow the collapse of both Silicon Valley Bank (SVB) and Signature Bank,” Tillis said. “It is clear to me the Fed made mistakes, and greater transparency is needed to determine what went wrong so we can ensure that it doesn’t happen again. I’m proud to introduce this bipartisan legislation, which advances Federal Reserve transparency and accountability while still maintaining crucial Fed independence over monetary policy decision.”
Along with Tillis and Warren, the bill is sponsored by Sens. Mike Rounds (R-SD), Kyrsten Sinema (I-AZ), Bill Hagerty (R-TN), Richard Blumenthal (D-CT), Cynthia Lummis (R-WY), Ted Cruz (R-TX), and J.D. Vance (R-OH).
“More and more lawmakers are troubled by the Fed’s key role in the recent bank failures, and this bipartisan bill underscores the momentum in Congress for enhanced transparency measures to hold Fed officials accountable for their actions,” Warren said. “After the largest ethics scandal in the history of the Federal Reserve System and now a failed multibillion-dollar bank under its watch, the Fed cannot ignore congressional oversight and stonewall the American people.”