United States Senators Elizabeth Warren (D-Mass.) and Pat Toomey (R-Pa.), Ranking Member of the Senate Banking Committee, yesterday announced the bipartisan Financial Regulators Transparency Act, legislation that would strengthen Federal Reserve accountability and ensure that no financial regulator can withhold critical ethics-related information from Congress.
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. Together, 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 Senator Pat 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 Senator Elizabeth 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
- 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.