FSC Majority | Week in Review
Posted by Staff on July 11, 2014
Committee Seeks Accountability and Transparency at the Federal Reserve

On Thursday, the Financial Services Committee held a hearing to examine H.R. 5018, the Federal Reserve Accountability and Transparency Act. The proposal is the first piece of legislation to arise from the Committee’s Federal Reserve Centennial Oversight Project.

"We do not suggest for a moment that Congress, much less the White House or Treasury, should conduct monetary policy operations. We continue to respect the Federal Reserve’s independence in monetary policy. But that independence and discretion must be paired with appropriate transparency and accountability. What we require today in this legislation is that the Fed use a clear map of its own choosing to set the course for monetary policy and share that map with the rest of us," Chairman Hensarling (R-TX) said.

Other members of the committee also stressed that the Fed’s independence needs to be paired with transparency and accountability, for "an independent Fed shouldn't equal an opaque Fed," said Rep. Randy Hultgren (R-IL).

Rep. Bill Huizenga (R-MI), the sponsor of H.R. 5018, said the bill “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.”

Rep. Scott Garrett (R-NJ) said, “Despite setting regulatory policies that impact millions of Americans, the Federal Reserve – by and large – operates in secret. 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.”


Rep. Sean Duffy | FDIC boss visits Wausau to discuss banking regulations 

"We may have competing interests," said Duffy, a member of the House Financial Services Committee. "We want to make sure we have sound, stable lending. The chairman comes from a little different perspective after going through the crisis and all the stress that has been put on him and the FDIC team. Maybe they're a little more cautious than we'd like them to be right now."

Weekend Must Reads

Daily Signal | Ending Ex-Im Bank is All About Governing

Ex-Im is rife with corruption, doesn’t promote competition, costs taxpayers billions of dollars and threatens American jobs. It’s all about politically connected big businesses getting bigger with help from Uncle Sam. It’s not fair, not necessary, and shouldn’t be a hard decision for Congress.

The Wall Street Journal 
| Free People, Free Markets

The answer to our current slow growth and self-doubt isn't a set of magical "new ideas" or some unknown orator from the provinces. The answer is to rediscover the eternal truths that have helped America escape malaise and turmoil in the past.

Economics One | New Legislation Requires Fed to Adopt Policy Rule

A lot of research and experience shows that more predictable rules-based monetary policy leads to better economic performance. So the Federal Reserve Accountability and Transparency Act is good news.
    On the Horizon 

July 15, 2014 10:00 a.m.
Oversight and Investigations Subcommittee Hearing

"The Department of Justice’s ‘Operation Choke Point"

July 15, 2014 2:00 p.m.
Financial Institutions and Consumer Credit Subcommittee Hearing

"Examining Regulatory Relief Proposals for Community Financial Institutions, Part II"

July 16, 2014 10:00 a.m.
Full Committee Hearing

"Monetary Policy and the State of the Economy"

July 17, 2014 9:45 a.m.
Monetary Policy and Trade Subcommittee Hearing

"A Legislative Proposal Entitled the ‘Bank Account Seizure of Terrorist Assets (BASTA) Act"

  In the News

Wall Street Journal | House Republicans Want Fed to Adopt Policy-Making Rules

Financial Times | Lew challenged over Volcker rule impact

Reuters| Lawmaker questions NY Fed role in U.S. regulatory risk panel

Holland Sentinel | Reps. Huizenga, Garrett release major fed reform legislation

New York Times: | House Republicans Resume Efforts to Reduce Fed’s Power

Politico Pro: | GOP to Fed: More to come

Bloomberg: | Lew Confronted Over Volcker Rule Effect on Bond Liquidity

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