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From Banking and Finance Law Daily, September 18, 2014

House passes bill to audit the Fed

By J. Preston Carter, J.D., LL.M.

The House has passed the Federal Reserve Transparency Act (H.R. 24), a bipartisan bill that would require the Government Accountability Office to conduct an audit of the Federal Reserve System and Federal Reserve Banks within one year. The GAO would then present its findings in a report to Congress 90 days after the audit is completed. The report is to include a detailed description of the findings of the audit together with recommendations for legislative or administrative action that the GAO determines appropriate.

“It’s time to audit the Fed and make sure it’s accountable to the American people,” House Speaker John Boehner (R-Ohio) said. The Sept. 17, 2014, vote on H.R. 24 was 333-92, with six abstentions.

According to Rep. Lynn Westmorland (R-Ga), Committee Whip on the House Financial Services Committee, “Government agencies, such as the Federal Reserve, have become these large, bureaucratic corporations. There is always room to increase accountability and oversight, and improving transparency is the place to start. The president promised this administration would be the most transparent yet, but the reality is it’s been anything but that.”

This measure has a more narrow scope than two other bills introduced this year to bring greater transparency to the Fed: H.R. 3928, the Federal Reserve Accountability and Transparency (FRAT) Act (see Banking and Finance Law DailyJan. 28, 2014), and H.R. 5018, also named the Federal Reserve Accountability and Transparency (FRAT) Act (see Banking and Finance Law DailyJuly 9, 2014).

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