< Back to H.R. 1160 (105th Congress, 1997–1998)

Text of the Federal Reserve Audit and Accountability Act

This bill was introduced on March 20, 1997, in a previous session of Congress, but was not enacted. The text of the bill below is as of Mar 20, 1997 (Introduced).

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HR 1160 IH

105th CONGRESS

1st Session

H. R. 1160

To promote accountability and the public interest in the operation of the Federal Reserve System, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

March 20, 1997

Mr. GONZALEZ introduced the following bill; which was referred to the Committee on Banking and Financial Services, and in addition to the Committee on Government Reform and Oversight, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned


A BILL

To promote accountability and the public interest in the operation of the Federal Reserve System, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ‘Federal Reserve Audit and Accountability Act’.

SEC. 2. APPOINTMENT OF FEDERAL RESERVE BANK PRESIDENTS BY THE PRESIDENT BY AND WITH THE CONSENT OF THE SENATE.

    (a) IN GENERAL- Section 4 of the Federal Reserve Act is amended by inserting after the 4th undesignated paragraph (12 U.S.C. 341; relating to general corporate powers) the following new subsection:

    ‘(e) BANK PRESIDENTS AND 1ST VICE PRESIDENTS-

      ‘(1) APPOINTMENT OF PRESIDENT- The President shall appoint, by and with the consent of the Senate, a president for each Federal reserve bank.

      ‘(2) APPOINTMENT OF 1ST VICE PRESIDENT- The president of each Federal reserve bank shall appoint a first vice president for the bank.

      ‘(3) TERMS- The president and first vice president shall be appointed for terms of 5 years.

      ‘(4) DUTY OF PRESIDENT- The president of a Federal reserve bank shall be the chief executive officer of the bank.

      ‘(5) DUTY OF 1ST VICE PRESIDENT- In addition to any other duties of the first vice president of a Federal reserve bank, the first vice president shall, in the absence or disability of the president or during a vacancy in the office of president, serve as chief executive officer of the bank.

      ‘(6) VACANCY- Whenever a vacancy shall occur in the office of the president or the first vice president, it shall be filled in the manner provided for the original appointment and the person so appointed shall hold office until the expiration of the term to which such person’s predecessor was appointed.’.

    (b) TRANSITION-

      (1) PRESIDENT- The first appointment of the president for each Federal reserve bank which is made in accordance with the amendment made by subsection (a) shall take place upon the earlier of--

        (A) the expiration of the term of the president of the bank who is serving in such office on the date of the enactment of this Act; or

        (B) the occurrence of the first vacancy in the office of president of the bank after the date of the enactment of this Act.

      (2) 1ST VICE PRESIDENT- Notwithstanding any provision of the Federal Reserve Act, the term of the first vice president of any Federal reserve bank who was appointed to such position before the date of the enactment of this Act shall end as of the

date on which the president of the bank is first appointed in accordance with the amendment made by subsection (a) and a first vice president shall be appointed in the manner provided by such amendment.

    (c) TECHNICAL AND CONFORMING AMENDMENT- The subdivision designated ‘Fifth.’ of the 4th undesignated paragraph of section 4 of the Federal Reserve Act (12 U.S.C. 341) is amended--

      (1) in the 1st sentence, by striking ‘a president, vice presidents, and’; and

      (2) by striking the 2d, 3d, and 4th sentences and inserting the following new sentence: ‘All executive officers and all employees of the bank shall be directly responsible to the president of the bank.’.

SEC. 3. GAO AUDITS OF FEDERAL RESERVE BOARD AND FEDERAL RESERVE BANKS REQUIRED; ITEMIZED BUDGETS.

    (a) REMOVAL OF LIMITATION ON GAO AUDITS- Section 714(b) of title 31, United States Code, is amended by striking the 2d sentence and inserting the following new sentence: ‘In the case of any audit of the Board of Governors of the Federal Reserve System or any Federal reserve bank pursuant to the preceding sentence, the audit may not include transactions for or with a foreign central bank, government of a foreign country, or nonprivate

international financing organization or any part of any discussion or communication among or between members of the Board of Governors of the Federal Reserve System or officers or employees of such Board which is related to any such transaction.’.

    (b) GAO AUDIT OF CASH VAULTS- Section 714 of title 31, United States Code, is amended by adding at the end the following new subsection:

    ‘(e) AUDIT OF FEDERAL RESERVE SYSTEM VAULT FACILITIES-

      ‘(1) IN GENERAL- The Comptroller General of the United States shall audit the vault facilities of the Board of Governors of the Federal Reserve System and each Federal reserve bank at least once every 3 years to determine if a system of proper internal controls is being maintained with respect to each such facility.

      ‘(2) EXAMINATION OF REPORTS OF INDEPENDENT AUDITORS- The Comptroller General shall regularly examine the reports of independent auditors who examine any vault facility referred to in paragraph (1) to determine if such audits have been properly performed.

      ‘(3) REPORT OF SIGNIFICANT PROBLEMS- The Comptroller General shall report any significant problem discovered with regard to any vault facility referred to in paragraph (1) or any audit described in paragraph (2) to--

        ‘(A) the Board of Governors of the Federal Reserve System;

        ‘(B) the Inspector General of the Federal Reserve System; and

        ‘(C) the chairperson and the ranking minority member of the Committee on Banking and Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate.’.

    (c) ITEMIZED BUDGETS- The Federal Reserve Act (12 U.S.C. 221 et seq.) is amended by inserting after section 11A the following new section:

‘SEC. 11B. ITEMIZED BUDGETS.

    ‘(a) IN GENERAL- During the first 15 days of each regular session of Congress, the estimated receipts and proposed expenditures of the Board of Governors of the Federal Reserve System and all Federal Reserve Banks for the following fiscal year and the 2 succeeding fiscal years shall be transmitted to the Congress.

    ‘(b) FORM OF BUDGET- The budget submitted pursuant to subsection (a) shall be transmitted in the same form and shall meet the same requirements, other than

the requirement relating to the budget message, as the budget of the United States Government transmitted in accordance with section 1105 of title 31, United States Code.’.

SEC. 4. PROMPT PUBLIC DISCLOSURE OF OPEN MARKET COMMITTEE MEETINGS.

    Section 12A of the Federal Reserve Act (12 U.S.C. 263) is amended by adding at the end the following new subsection:

    ‘(d) PROMPT PUBLIC DISCLOSURES OF MEETINGS-

      ‘(1) TRANSCRIPTION OF EACH MEETING- Subject to paragraph (3), a written verbatim transcript of the discussion at each meeting of the Federal Open Market Committee shall be maintained by the Board and made available to the public before the end of the 1-year period beginning on the date of the meeting and shall be treated as a Government publication for purposes of making such material available to depository libraries through the facilities of the Superintendent of Documents in accordance with chapter 19 of title 41, United States Code.

      ‘(2) PROMPT DISCLOSURE OF POLICY ACTIONS- An explicit, written description of any determination, decision, directive, or other conclusion made by the Federal Open Market Committee at any meeting of the committee, including any directive or instruction sent to any Federal reserve bank or Federal reserve agent in connection with any open market operation, shall be made available to the public by the end of the 1-hour period beginning at the time the Board or any such bank or agent begins to implement any such determination, decision, directive, conclusion, directive, or instruction.

      ‘(3) LIMITED REDACTION AUTHORITY-

        ‘(A) IN GENERAL- No verbatim transcript made available to the public pursuant to paragraph (1) may be redacted in any way other than to redact a specific reference to a foreign central bank.

        ‘(B) COMPLIANCE AUDIT- The Comptroller General of the United States shall periodically audit compliance by the Board with the requirements of subparagraph (A).

      ‘(4) RELEASE OF PRIOR TRANSCRIPTS- All transcripts maintained by the Board of any meeting of the Federal Open Market Committee which was held more than 1 year before the date of the enactment of the Federal Reserve Audit and Accountability Act shall be made available to the public in the manner provided under paragraph (1) no later than December 31, 1997.

      ‘(5) MEETING INCLUDES EXECUTIVE SESSION- For purposes of this subsection, the term ‘meeting’ includes any executive session of the Federal Open Market Committee or any informal meeting, teleconference call, or other occasion at which a quorum of the members of the committee are participating.’.

SEC. 23. PRESIDENTIALLY APPOINTED INSPECTOR GENERAL FOR FEDERAL RESERVE SYSTEM.

    (a) AMENDMENTS TO THE INSPECTOR GENERAL ACT OF 1978- The Inspector General Act of 1978 (5 U.S.C. App.) is amended--

      (1) in section 11--

        (A) in paragraph (1), by inserting ‘the Chairman of the Board of Governors of the Federal Reserve System;’ after ‘the Chairperson of the Federal Deposit Insurance Corporation;’; and

        (B) in paragraph (2), by inserting ‘the Board of Governors of the Federal Reserve System,’ after ‘the Federal Deposit Insurance Corporation,’;

      (2) by redesignating section 8H as 8I and inserting after section 8G the following new section:

‘SEC. 8H. SPECIAL PROVISIONS CONCERNING THE FEDERAL RESERVE BOARD.

    ‘(a) DELEGATION- The Chairman of the Board of Governors of the Federal Reserve System may delegate the authority specified in the second sentence of section 3(a) to the Vice Chairman of the Board of Governors of the Federal Reserve System, but may not delegate such authority to any other officer or employee of the Board or any Federal reserve bank.

    ‘(b) PERSONNEL- Notwithstanding paragraphs (7) and (8) of section 6(a), the Inspector General of the Board of Governors of the Federal Reserve System may select, appoint, and employ such officers and employees as may be necessary for carrying out the functions, powers, and duties of the Office of Inspector General and to obtain the temporary or intermittent services of experts or consultants or an organization of experts or consultants, subject to the applicable laws and regulations that govern such selections, appointments, and employment, and the obtaining of such services, with the Federal Reserve System.

    ‘(c) CLARIFICATION OF AUTHORITY- The authority of the Inspector General of the Board of Governors of the Federal Reserve System extends to the conditions, operations, and all facilities of the Federal reserve banks.’;

      (3) in section 8I, as so redesignated, by striking ‘or 8E’ and inserting ‘8E, or 8H’; and

      (4) in section 8G(a)(2), by striking ‘the Board of Governors of the Federal Reserve System,’.

    (b) POSITION AT LEVEL IV OF THE EXECUTIVE SCHEDULE- Section 5315 of title 5, United States Code, is amended by inserting after ‘Inspector General, Federal Deposit Insurance Corporation.’ the following:

      ‘Inspector General, Board of Governors of the Federal Reserve System.’.

    (c) TRANSITION PERIOD-

      (1) CURRENT SERVICE- Except as otherwise provided by law, the individual serving as the Inspector General of the Board of Governors of the Federal Reserve System before the date of enactment of this Act may continue to serve in such position until the earlier of--

        (A) the date on which the President appoints a successor under section 3(a) of the Inspector General Act of 1978; or

        (B) the date which is 6 months after the date of enactment of this Act.

      (2) DEFINITION- For purposes of paragraph (1), the term ‘successor’ may include the individual holding the position of Inspector General of the Board of Governors of the Federal Reserve System on or after the date of enactment of this Act.