What This Bill Does
This bill changes how the Federal Reserve is run by giving the President more power to appoint top leaders. It also reorganizes the 12 regional Federal Reserve banks into 5 larger districts. The bill aims to make the Federal Reserve more accountable to elected officials.
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Who It Affects
- The President of the United States
- The Senate
- The Board of Governors of the Federal Reserve System
- Presidents and employees of Federal Reserve banks
- National banks that are members of the Federal Reserve System
- Congress
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Key Provisions
- The President appoints a General Counsel for the Federal Reserve Board with Senate approval, and federal hiring rules do not apply to this position (Sec. 2)
- The President appoints Federal Reserve bank presidents with Senate approval instead of regional bank directors, and presidents cannot serve more than 10 years total (Sec. 3)
- Federal Reserve bank presidents must have lived and worked in their district for at least 4 years before being nominated (Sec. 3)
- The continental United States is divided into 5 Federal Reserve districts instead of 12, with specific states assigned to each district and banks located in New York, Cleveland, Kansas City, Dallas, and San Francisco (Sec. 4)
- The Federal Reserve cannot spend its money to lobby Congress or government officials without Congress's permission, though employees can communicate with Congress through proper channels (Sec. 6)
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What Changes
If this becomes law, the President and Senate would approve Federal Reserve bank presidents instead of regional bank directors. The 12 regional Federal Reserve banks would be consolidated into 5 larger ones serving different regions of the country. The Federal Reserve Board would have a new General Counsel appointed by the President with Senate approval. Federal Reserve leaders would face residency requirements and term limits. The Federal Reserve would be restricted from using its funds to influence lawmakers.
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Important Definitions
- **"Resident of any one Federal Reserve district"** means a person whose home and main place of work has been in that Federal Reserve district for at least 4 years before being nominated to the Federal Reserve Board (Sec. 5)
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Effective Date
Not specified in bill text
II
118TH CONGRESS
1ST SESSION
S. 1155
To amend the Federal Reserve Act to provide greater accountability to the
Federal Reserve System, and for other purposes.
IN THE SENATE OF THE UNITED STATES
MARCH 30, 2023
Mr. TILLIS (for himself, Ms. LUMMIS, Mr. CRUZ, and Mr. CRAMER) intro-
duced the following bill; which was read twice and referred to the Com-
mittee on Banking, Housing, and Urban Affairs
A BILL
To amend the Federal Reserve Act to provide greater ac-
countability to the Federal Reserve System, and for other
purposes.
Be it enacted by the Senate and House of Representa-
1
tives of the United States of America in Congress assembled,
2
SECTION 1. SHORT TITLE.
3
This Act may be cited as the ‘‘Federal Reserve Ac-
4
countability Act of 2023’’.
5
SEC. 2. APPOINTMENT OF GENERAL COUNSEL.
6
Subsection (l) of section 11 of the Federal Reserve
7
Act (12 U.S.C. 248) is amended by inserting ‘‘The Presi-
8
dent shall appoint a general counsel for the Board, by and
9
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•S 1155 IS
with the advice and consent of the Senate. Sections 3345
1
through 3349b of title 5, United States Code, shall not
2
apply to the general counsel.’’ after the period at the end
3
of the first sentence.
4
SEC. 3. APPOINTMENT OF FEDERAL RESERVE BANK PRESI-
5
DENTS.
6
(a) IN GENERAL.—The fifth paragraph of the fourth
7
unenumerated paragraph of section 4 of the Federal Re-
8
serve Act (12 U.S.C. 341) is amended—
9
(1) in the first sentence, by striking ‘‘a presi-
10
dent, vice presidents,’’ and inserting ‘‘vice presi-
11
dents’’;
12
(2) in the second sentence, by striking ‘‘Class
13
B and Class C directors of the bank, with the ap-
14
proval of the Board of Governors of the Federal Re-
15
serve System’’ and inserting ‘‘President of the
16
United States, by and with the advice and consent
17
of the Senate’’;
18
(3) by striking the third sentence and inserting
19
‘‘The first vice president of the bank shall be ap-
20
pointed by the Class B and Class C board of direc-
21
tors of the bank for a term of 5 years, and shall,
22
in the absence or disability of the president or dur-
23
ing a vacancy in the office of the president, serve as
24
chief executive officer of the bank, until a nominee
25
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•S 1155 IS
for president is confirmed by the Senate or the
1
President of the United States appoints an acting
2
president under sections 3345 through 3349b of title
3
5, United States Code.’’;
4
(4) in the fourth sentence, by striking ‘‘the
5
president or’’;
6
(5) by inserting ‘‘A president may continue to
7
serve after the expiration of the term of office to
8
which the president was appointed until the earlier
9
of the date on which a successor has been appointed
10
and qualified, the date on which the next session of
11
Congress subsequent to the expiration of such term
12
expires, or the date on which the President of the
13
United States removes the president. No appointed
14
president shall serve more than a total of 10 years,
15
not including any such continuation in service.’’
16
after the period at the end of the fourth sentence;
17
and
18
(6) by inserting ‘‘The president shall have their
19
primary residence and principal place of business lo-
20
cated in that Federal Reserve district for not fewer
21
than 4 years before the date on which the President
22
nominates the individual to be president of the Fed-
23
eral Reserve bank for that Federal Reserve district.’’
24
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after the period at the end of the fifth sentence, as
1
added by paragraph (5) of this subsection.
2
(b) SUSPENSION OR REMOVAL OF OFFICERS.—Sec-
3
tion 11(f) of the Federal Reserve Act (12 U.S.C. 248(f))
4
is amended by inserting ‘‘(except the president)’’ after
5
‘‘reserve bank’’.
6
(c) APPLICABILITY.—Sections 3345 through 3349b
7
of title 5, United States Code, shall apply to presidents
8
of Federal Reserve banks in the same manner as officers
9
of Executive agencies.
10
SEC. 4. FEDERAL RESERVE DISTRICTS.
11
(a) IN GENERAL.—Section 2 of the Federal Reserve
12
Act (12 U.S.C. 222) is amended by striking the first un-
13
designated paragraph and inserting the following:
14
‘‘The continental United States shall be divided into
15
5 Federal Reserve districts. The First Federal Reserve
16
District shall be composed of Maine, New Hampshire,
17
Vermont, Massachusetts, Rhode Island, Connecticut, New
18
York, Pennsylvania, New Jersey, Delaware, the Common-
19
wealth of Puerto Rico, and the United States Virgin Is-
20
lands, with the city of New York, New York, as the loca-
21
tion of the Federal Reserve bank. The Second Federal Re-
22
serve District shall be composed of Ohio, West Virginia,
23
Virginia, Maryland, Michigan, Indiana, Kentucky, Illinois,
24
Wisconsin, Minnesota, and the District of Columbia, with
25
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•S 1155 IS
the city of Cleveland, Ohio, as the location of the Federal
1
Reserve bank. The Third Federal Reserve District shall
2
be composed of Missouri, Kansas, Oklahoma, Colorado,
3
Wyoming, Nebraska, Iowa, North Dakota, South Dakota,
4
and Montana, with the city of Kansas City, Missouri, as
5
the location of the Federal Reserve bank. The Fourth Fed-
6
eral Reserve District shall be composed of Texas, Arkan-
7
sas, Louisiana, Mississippi, Alabama, Tennessee, Georgia,
8
North Carolina, South Carolina, and Florida, with the city
9
of Dallas, Texas, as the location of the Federal Reserve
10
bank. The Fifth Federal Reserve District shall be com-
11
posed of California, Oregon, Washington, Alaska, Hawaii,
12
Idaho, Nevada, Utah, Arizona, New Mexico, Guam, Amer-
13
ican Samoa, and the Northern Mariana Islands, with the
14
city of San Francisco, California, as the location of the
15
Federal Reserve bank. Every national bank in any State
16
shall, upon commencing business, become a member bank
17
of the Federal Reserve System by subscribing and paying
18
for stock in the Federal Reserve bank of its district in
19
accordance with the provisions of this Act and shall there-
20
upon be an insured bank under the Federal Deposit Insur-
21
ance Act, and failure to do so shall subject such bank to
22
the penalty provided by the sixth paragraph of this sec-
23
tion.’’.
24
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(b) FEDERAL OPEN MARKET COMMITTEE.—Section
1
12A of the Federal Reserve Act (12 U.S.C. 263) is amend-
2
ed by striking subsection (a) and inserting the following:
3
‘‘(a) There is hereby created a Federal Open Market
4
Committee (hereinafter referred to as the ‘Committee’),
5
which shall consist of the members of the Board of Gov-
6
ernors of the Federal Reserve System and the chief execu-
7
tive officers of the 5 Federal Reserve banks.’’.
8
(c) TECHNICAL AND CONFORMING AMENDMENTS.—
9
(1) Section 11 of the Federal Reserve Act (12
10
U.S.C. 248) is amended by striking subsection (e).
11
(2) The third undesignated paragraph of sec-
12
tion 16 of the Federal Reserve Act (12 U.S.C. 413)
13
is amended, in the third sentence, by striking
14
‘‘twelve’’ and inserting ‘‘5’’.
15
SEC. 5. BOARD OF GOVERNORS OF THE FEDERAL RESERVE
16
SYSTEM.
17
The first undesginated paragraph of section 10 of the
18
Federal Reserve Act (12 U.S.C. 241) is amended—
19
(1) in the second sentence, by striking ‘‘one of
20
whom shall be selected from’’ and inserting ‘‘2 of
21
whom may be residents of’’; and
22
(2) by inserting ‘‘In this paragraph, the term
23
‘resident of any one Federal Reserve district’ means
24
an individual whose primary residence and principal
25
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•S 1155 IS
place of business has been located in a Federal Re-
1
serve district for not fewer than 4 years before the
2
date on which the President nominates the indi-
3
vidual as a member of the Board.’’ after the period
4
at the end of the fourth sentence.
5
SEC. 6. LOBBYING WITH MONEYS.
6
The Federal Reserve Act is amended by inserting
7
after section 15 (12 U.S.C. 391 et seq.) the following:
8
‘‘SEC. 15A. LOBBYING WITH MONEYS.
9
‘‘No part of the income, interest, fees, money, or
10
other funds of the Board of Governors of the Federal Re-
11
serve System or any Federal Reserve bank shall, in the
12
absence of express authorization by Congress, be used di-
13
rectly or indirectly to pay for any personal service, adver-
14
tisement, telegram, telephone, letter, printed or written
15
matter, or other device, intended or designed to influence
16
in any manner a Member of Congress, a jurisdiction, or
17
an official of any government, to favor, adopt, or oppose,
18
by vote or otherwise, any legislation, law, ratification, pol-
19
icy, or appropriation, whether before or after the introduc-
20
tion of any bill, measure, or resolution proposing such leg-
21
islation, law, ratification, policy, or appropriation; but this
22
shall not prevent officers or employees of the Federal Re-
23
serve System from communicating to any such Member
24
or official, at his request, or to Congress or such official,
25
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•S 1155 IS
through the proper official channels, requests for any leg-
1
islation, law, ratification, policy, or appropriations which
2
they deem necessary for the efficient conduct of the public
3
business, or from making any communication whose prohi-
4
bition by this section might, in the opinion of the Attorney
5
General, violate the Constitution or interfere with the con-
6
duct of foreign policy, counter-intelligence, intelligence, or
7
national security activities. Violations of this section shall
8
constitute violations of section 1352(a) of title 31, United
9
States Code.’’.
10
Æ
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