WASHINGTON Rep. Scott Garrett, R-N.J., a senior member of the House Financial Services Committee, is preparing to unveil legislation designed to increase public awareness of the Federal Reserve Board's rule-writing process.
Garrett, who summarized the provisions of his bill in a Wall Street Journal op-ed posted Tuesday night, said too much of the Fed's regulatory activities including its drafting of Dodd-Frank Act rules "take place in secret."
"As the Fed's own website notes, the central bank has convened only five open meetings on rule-making during 2012 and 2013," Garrett said in the op-ed. "This situation requires reform, and to this end I will shortly introduce in Congress the Federal Reserve Accountability and Transparency Act. Its straightforward provisions will help open up the often opaque workings of the central bank."
The bill would require the agency to conduct a cost-benefit analysis for proposed rules, publish details about international agreements on policies involving other countries such as the Basel III accords and solicit market comments about pending accords before the Fed enters into negotiations. Garrett said that, with the Fed even more involved in the workings of the capital markets, his bill would also require certain employees of the central bank to disclose personal investment activities, similar to disclosure rules that exist for employees of the Securities and Exchange Commission.
"In recent years the Fed's conduct of monetary policy has become more transparent, but its rule-making and negotiations with international partners remains a black box to the American people," Garrett wrote. "It is my hope to foster greater accountability and transparency at the Fed and re-establish Congress's constitutional role in providing robust oversight of the central bank's regulatory reach."