WASHINGTON – U.S. Senator Kevin Cramer (R-ND), member of the Senate Committee on Banking, Housing and Urban Affairs, and Ranking Member Pat Toomey (R-PA) introduced the Federal Reserve Accountability Act to address left-leaning political activism and ensure greater geographic and professional diversity within the Federal Reserve System (Fed).

“Although their dual mandate is clear cut, the Federal Reserve System has recently shifted its focus by wading into woke environmental, social, and governance matters. This is not the job of the Federal Reserve. Our legislation reiterates Congressional oversight of the Fed, improves accountability, and protects our central bank from politicization,” said Senator Cramer. 

“Despite their narrow and nonpartisan statutory mandates, the Fed and regional Fed banks have increasingly inserted themselves into politically-charged issues like global warming and social justice,” said Senator Toomey. “Congress has a responsibility to ensure the Fed does not become a political actor. This legislation will further that important goal by reforming the Fed to make it more accountable to Congress and the American people.”

Key Reforms in the Federal Reserve Accountability Act:

  • To increase accountability, the bill makes the presidents of Fed regional banks presidentially-appointed, Senate-confirmed positions. It will also make the Fed’s General Counsel—an immensely powerful position that has been called the “eighth governor” of the Fed’s Board of Governors—a presidentially-appointed, Senate-confirmed position.
  • To address problems with left-leaning political bias and limit the concentration of power in Washington, the bill reduces the number of Fed regional banks from twelve to five. This will enable more effective congressional oversight and ensure that all presidents of Fed regional banks have permanent seats on the Federal Open Market Committee (FOMC).
  • To address the problem of Fed regional banks engaging in political lobbying, the bill will apply the federal Anti-Lobbying Act to the Fed regional banks and the Fed Board of Governors so that federal resources cannot be used for political lobbying at the state or federal level.
  • The bill will also strengthen current geographic diversity requirements for Fed Governors so that they represent the interests of a cross-section of America, not just the Beltway, and imposes strict new residency requirements on Fed regional bank presidents so that they actually come from their Fed districts.

Click here for bill text.

Click here for a section-by-section summary. 

Joining Senators Cramer and Toomey are Senators Mike Lee (R-UT), Cynthia Lummis (R-WY), Thom Tillis (R-NC), Bill Hagerty (R-TN), and Ted Cruz (R-TX).

Background:
In September, Senator Cramer penned an op-ed in Fox News advising the financial services industry to resist the urge to weigh in on social and cultural issues. Learn more here.

In 2021, Senator Cramer introduced the Fair Access to Banking Act, which would protect fair access to financial services and ensure providers operate in a safe and sound manner. It builds off the Trump Administration’s Fair Access Rule and the Freedom Financing Act which Senator Cramer introduced last Congress. Learn more here.