Although these bills contain a number of wide-ranging provisions, most provisions can be grouped into four broad categories:
Changes to Fed g overnance. Changes to oversight and disclosure. Some proposals aim to make the Fed more accountable to Congress by increasing congressional oversight or requiring the Fed to disclose more information to Congress and the public. Some proposals would require the Fed to compare its monetary policy decisions to those prescribed by a Taylor Rule (described below) and report those findings to Congress. Changes to the Fed's emergency lending powers. Some proposals would reduce the Fed's discretion to provide emergency assistance under Section 13(3) of the Federal Reserve Act. This report analyzes these provisions and the policy debate surrounding them. Legislative Activity

The following bills affecting the Federal Reserve have seen committee or floor action in the 114 th Congress. 26 / P.L. 22 / P.L. The Fed's budget is not subject to congressional appropriations. 3189 and H.R. H.R. S. 1484 / S. 1910 would require the President of the New York Fed to be appointed by the President and confirmed by the Senate. 3189 , H.R. 5983 and S. 1484 / S. 1910 would shift responsibility for setting the interest rate paid to banks on reserves from the Board of Governors to the FOMC. H.R. 3189 and H.R. Congressional Commission. H.R. 5983 . H.R. H.R. 3189 , as passed by the House, would permanently eliminate the Fed's surplus and transfer its balance to the Treasury. H.R. Criticism intensified following the extensive assistance provided by the Fed during the financial crisis. Policy Proposals

GAO Audit. 24 and S. 2232 would require a one-time GAO audit of the Fed that is not subject to statutory restrictions. 3189 , and H.R. H.R. S. 1484 / S. 1910 , H.R. 3189 , and H.R. Release of FOMC Transcripts. H.R. H.R. 5983 would subject the non-monetary policy functions of the Fed's Board of Governors and 12 privately owned regional banks to the congressional appropriations process. H.R. 3189 would require the Fed's public rule-making to include quantitative and qualitative cost-benefit analysis and a post-adoption impact assessment. H.R. Disclosure of International Negotiations. H.R. 3189 and H.R. H.R. Policy Proposals

S. 1484 / S. 1910 would require the Fed to include in a quarterly report to Congress on monetary policy and the economy a discussion of any mathematical rules or other strategies it uses in monetary policy deliberations and how policy has deviated from those rules and strategies. A monetary policy rule like the Taylor rule would presumably meet this requirement. H.R. 3189 and H.R. 5983 would amend Section 13(3) to limit the Fed's discretion to make emergency loans. Concluding Thoughts

The various proposals reviewed in this report are wide ranging and diverse; many are united by the goals of increasing the Fed's accountability to Congress and decreasing Fed discretion. Whereas some provisions make very minor changes, taken together the proposals would arguably somewhat reduce the Fed's independence from Congress. To some extent, a tradeoff between independence and accountability is unavoidable.
The Federal Reserve (Fed) is the subject of legislation being considered in the 114th Congress. These bills contain wide-ranging provisions that can be grouped into four broad categories:
Changes to Fed governance. Some proposals would change the Fed's institutional structure. H.R. 22 (P.L. 114-94) reduced the dividend paid by the Fed to large commercial banks that hold stock in the Fed and permanently capped the Fed's surplus at $10 billion. H.R. 3189 would permanently eliminate the Fed's surplus. H.R. 26 (P.L. 114-1) required at least one nominee for the Fed's board of governors to have community banking experience. S. 1484/S. 1910 would make the New York Fed President a presidentially appointed position. H.R. 3189 and H.R. 5983 would increase the voting weight of regional Fed presidents on the FOMC. S. 1484/S. 1910, H.R. 3189, H.R. 5983, and H.R. 2912 would create a congressional commission to recommend reforms to the Fed.
Changes to oversight and disclosure. Some proposals aim to make the Fed more accountable to Congress by increasing congressional oversight or requiring the Fed to disclose more information to Congress and the public. H.R. 24, S. 2232, H.R. 3189, and H.R. 5983 would require Government Accountability Office (GAO) audits of the Fed that are not subject to current statutory restrictions. H.R. 3189 and H.R. 5983 would subject the Fed's rulemakings to cost-benefit analysis requirements and require the Fed to publicly disclose information on international negotiations and the salaries and personal finances of certain officials and employees. H.R. 3189, H.R. 5983, and S. 1484/S. 1910 would require the FOMC to publicly release meeting transcripts. H.R. 5983 would subject the Fed's non-monetary policy functions to the congressional appropriations process.
Changes involving monetary policy rules (the Taylor Rule). H.R. 3189, H.R. 5983, and S. 1484/S. 1910 would require the Fed to compare its monetary policy decisions to those prescribed by a policy rule (Taylor Rule) and report those findings to Congress. Policy deviations from the rule would trigger GAO audits and congressional testimony in H.R. 3189 and H.R. 5983.
Changes to the Fed's emergency lending powers. H.R. 3189 and H.R. 5983 would reduce the Fed's discretion to make emergency loans under Section 13(3) of the Federal Reserve Act. The Fed used this authority to extend credit to non-bank financial firms during the financial crisis.
The proposals reviewed in this report are wide ranging and diverse; many are united by the goals of increasing the Fed's accountability to Congress and decreasing Fed discretion. Although some provisions make very minor changes, taken together the proposals would arguably somewhat reduce the Fed's independence from Congress. The Fed is more independent than most other agencies, which has traditionally been justified by its monetary policy responsibilities. Most research has found a positive relationship between monetary policy independence and economic outcomes. To some extent, a tradeoff between independence and accountability is unavoidable.
This report analyzes bills that have seen committee or floor action and the policy debate surrounding them.