WASHINGTON, D.C. – Today, U.S. Senators Thom Tillis (R-NC) and Elizabeth Warren (D-MA) led a bipartisan group of senators to introduce the bipartisan Financial Regulators Transparency Act, legislation that would strengthen Federal Reserve accountability and ensure that all financial regulators must be responsive to various information requests from Congress. These important reforms will help ensure Congress receives the information necessary to fully evaluate the recent collapses of Silicon Valley Bank (SVB) and Signature Bank. Joining Senators Tillis and Warren are Senators Mike Rounds (R-SD), Kyrsten Sinema (I-AZ), Bill Hagerty (R-TN), Richard Blumenthal (D-CT), Cynthis Lummis (R-WY), Ted Cruz (R-TX), and J.D. Vance (R-OH).
The bill would subject the regional Federal Reserve Banks to the Freedom of Information Act (FOIA) and ensure their responsiveness to congressional information requests; align the Fed with other large agencies by making its Inspector General a presidential appointee; and prohibit all financial regulatory agencies from denying congressional requests for ethics-related information. Additionally, the legislation 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. Together, these reforms would strengthen congressional oversight of the Fed and other financial regulatory agencies, while still explicitly maintaining the Federal Reserve’s independence on monetary policy issues.
“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,” said Senator Tillis. “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 introduced this bipartisan legislation, which advances Federal Reserve transparency and accountability, while still maintaining crucial Fed independence over monetary policy decision.”
“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,” said Senator Warren. “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.”
To read the full text of the bill, click here.
Specifically, the Financial Regulators Transparency Act would strengthen transparency and accountability at the Fed and other financial regulatory agencies through three categories of reforms:
Federal Reserve Regional Bank Reforms
- Subjects the regional Federal Reserve Banks to FOIA and Federal Records Act (recordkeeping law), as they are not currently subject to these laws.
- Provides all members of Congress the same ability to obtain information from the Fed regional banks that congressional committee chairs currently have to obtain info from other federal agencies, with some exceptions.
- Forbids Fed regional banks from withholding info requested by a member of Congress under FOIA on the grounds that the info is privileged pursuant to a common law privilege.
- Provides that Fed regional banks must prioritize FOIA requests made by a member of Congress.
- Prevents Fed regional banks from charging a member of Congress fees to process their FOIA request.
- Gives a member of Congress who has filed a FOIA request standing to bring a federal lawsuit against Fed regional banks to petition the court to order them to produce any record improperly withheld.
Financial Regulator Reforms
- Provides all members of Congress the same ability to obtain ethics-related information from financial regulators that congressional committee chairs currently have to obtain information from the financial regulators: the Fed Board and Reserve Banks, CFPB, SEC, FDIC, OCC, NCUA, and FHFA.
- Forbids financial regulators from withholding info requested by a member of Congress under FOIA on the grounds that the info is privileged pursuant to a common law privilege.
- Provides that financial regulators must prioritize FOIA requests made by a member of Congress.
- Prevents financial regulators from charging a member of Congress fees to process their FOIA request.
- Gives a member of Congress who has filed a FOIA request standing to bring a federal lawsuit against financial regulators to petition the court to order them to produce any record improperly withheld.
Federal Reserve Inspector General (IG) Reforms
- Makes the Fed IG a presidentially appointed and Senate-confirmed position.
- Clarifies that the Fed IG does not need the permission of a Fed regional bank in order to conduct oversight of a Fed regional bank.