The committee recently held a hearing to examine HR 5018, the Federal Reserve Accountability and Transparency Act. According to Rep. Bill Huizenga (R-Mich.), the bill would lift the Fed’s “veil of secrecy” by limiting Fed officials’ “blackout periods” to discuss policy with Congress, requiring the agency to provide a cost-benefit analysis for every regulation it issues, and urging it to adopt a “rule-based” approach to monetary policy.
“We do not suggest for a moment that Congress, much less the White House or Treasury, should conduct monetary policy operations,” said committee chairman Rep. Jeb Hensarling (R-Texas). “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.”
“Despite setting regulatory policies that impact millions of Americans, the Federal Reserve – by and large – operates in secret,” said Rep. Scott Garrett (R-N.J.) “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.”
The Fed declined to comment on the bill, but agency officials – including Fed Chair Janet Yellen – have said in the past that they need flexibility in case the need to veer from the rules arises.
Should the bill pass the House, it will still face an uphill battle in the Democrat-controlled Senate.
Republican members of the House Financial Services Committee say the Federal Reserve needs more oversight.