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Bipartisan US Senate Bill Calls for Greater Federal Reserve and SEC Transparency

Washington, DC, USA - July 18, 2017: A United States Senate committee hearing room. The United States Senate is the upper chamber of the United States Congress.

Sens. Elizabeth Warren (D-Mass.) and Pat Toomey (R-Pa.), ranking member of the Senate Banking Committee, announced the bipartisan Financial Regulators Transparency Act, legislation that would “strengthen Federal Reserve accountability” and ensure that no financial regulator, including the U.S. Securities and Exchange Commission, can withhold critical ethics-related information from Congress.

They claim the bill would subject the regional Federal Reserve Banks to the Freedom of Information Act 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. Together, Sens. Warren and Toomey say these reforms would strengthen congressional oversight of the Fed and other financial regulatory agencies.

“The Fed and regional Fed banks, despite being creatures of Congress, obstruct congressional oversight inquiries all too often,” said Toomey. “In light of this persistent refusal to comply with reasonable requests for information from both Republicans and Democrats, I’m glad to join with Senator Warren in pursuing reforms that will compel these public institutions to be more transparent and accountable to the American people.”

“During the largest ethics scandal in the history of the Federal Reserve system, Fed officials have stonewalled the American people and slow-walked their representatives in Congress,” said Warren. “This bipartisan bill is a necessary response to ensure that no financial regulators can ignore congressional oversight into ethics failures, and finally deliver more transparency and accountability for any wrongdoing.”

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 Include:

  • Subjects the regional Federal Reserve Banks to FOIA and Federal Records Act, 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 information requested by a member of Congress under FOIA on the grounds that the information 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 Include:

  • 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, Consumer Financial Protection Bureau, Securities and Exchange Commission, Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency, National Credit Union Administration, and Federal Housing Finance Agency.
  • Forbids financial regulators from withholding information requested by a member of Congress under FOIA on the grounds that the information 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 Reforms Include:

  • Makes the Fed inspector general 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.

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