Federal Reserve Financial Accountability and Transparency Act

Bill Number

H.R. 3173

Origin Chamber

House

Congress

119th Congress, Session 1

Policy Area

Finance and Financial Sector

Status

Introduced

Latest Action

2025-05-01: Referred to the House Committee on Financial Services.

Last Updated

2025-05-21T12:07:05Z

AI-Generated Summary

Federal Reserve Financial Accountability and Transparency Act (H.R. 3173)

Purpose

This bill aims to increase transparency and accountability of the Federal Reserve System by requiring more detailed financial and operational reporting in its annual report to Congress. It focuses on breaking down expenditures, staffing, research priorities, and regulatory activities to provide clearer oversight of the central bank's operations.

Key Provisions

• Expanded Annual Report Content: The Board of Governors of the Federal Reserve System must include in its annual report:
• A breakdown of annual expenditures and full-time equivalent employees (FTEs, a measure of staffing levels) for each of the 12 Federal Reserve Banks, categorized into specific areas:
• Supervision of financial institutions (e.g., examining banks for safety and compliance).
• Legal functions (e.g., providing legal advice and handling disputes).
• Core operations (e.g., managing currency distribution, electronic payments like automated clearing house services, check processing, and large-scale payment systems).
• Financial stability and open market operations (e.g., monitoring economic risks and buying/selling government securities to influence interest rates).
• Administrative functions (e.g., human resources, accounting, and information technology support).
• Economic research (e.g., analyzing economic data and trends).
• Engagements with international bodies (e.g., the Bank for International Settlements for global banking coordination, the Basel Committee on Banking Supervision for international standards, and the Network for Greening the Financial System for climate-related financial policies).
• Identification of the three most important research areas for the Board and each Federal Reserve Bank, based on expenditures and FTEs.
• Annual expenditures from the previous year dedicated to each proposed or finalized rule, guidance, or policy statement (these are official directives that shape banking regulations and practices).
• Effective Date: The new requirements take effect two years after the bill's enactment, allowing time for implementation.

Significant Changes to Existing Law

• Amends Section 10 of the Federal Reserve Act (12 U.S.C. 247), which currently requires the Board to submit an annual report to Congress on operations and activities.
• Adds a new subparagraph (B) mandating the detailed breakdowns listed above, expanding the report beyond general summaries to include granular financial and staffing data by category and institution.
• This is the first time the law would require specific reporting on international engagements and costs tied to individual regulatory actions.

Potential Impacts

• On Government Agencies: The Federal Reserve would face increased administrative burdens to track and report detailed data, potentially requiring new internal systems or processes. Congress gains better tools for oversight, which could lead to more informed budgetary or policy decisions regarding the Fed.
• On Citizens: Enhances public transparency into how the Federal Reserve spends funds (largely from its operations, not taxpayer money) and prioritizes activities, fostering greater trust in the institution that influences the economy, interest rates, and inflation.
• On International Relations: By reporting on engagements with global bodies, it could highlight the Fed's role in international finance, potentially affecting perceptions of U.S. leadership in global economic policy without directly altering diplomatic ties.

Main Stakeholders Affected

• Federal Reserve System: The Board of Governors and the 12 regional Federal Reserve Banks, who must compile and submit the expanded data.
• Congress: Particularly the House Committee on Financial Services, which receives and reviews the report for oversight purposes.
• Financial Institutions: Banks and other entities supervised by the Fed, as greater visibility into supervision costs and regulatory expenditures could influence compliance expectations.
• General Public and Economists: Benefit from accessible insights into the Fed's priorities, research, and spending, aiding broader understanding of monetary policy.

Notable Legal, Constitutional, or Political Implications

• Legal: Strengthens congressional oversight of an independent agency (the Federal Reserve operates with autonomy to avoid political interference in monetary policy) without altering its core independence or decision-making authority. No direct challenges to constitutional separation of powers, as it builds on existing reporting mandates.
• Constitutional: Aligns with Congress's enumerated power to regulate money and commerce (Article I, Section 8), reinforcing accountability for a quasi-public entity.
• Political: Could fuel debates on Federal Reserve transparency and accountability, especially amid criticisms of its secrecy or influence; it promotes fiscal responsibility but might invite partisan scrutiny of the Fed's international or research activities.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Williams, Roger [R-TX-25]

Recent Actions

• 2025-05-01: Referred to the House Committee on Financial Services.
• 2025-05-01: Introduced in House
• 2025-05-01: Introduced in House

Bill Versions

• Federal Reserve Financial Accountability and Transparency Act — issued 2025-05-01 — PDF (4 pages)