Federal Reserve Transparency Act of 2009

What is HR 1207?

HR 1207, if enacted, would “reform the manner in which the Board of Governors of the Federal Reserve System is audited by the Comptroller General of the United States.” The proposed law would also change the manner in which audits are reported.

Here is a link to sign the Petition to audit the Fed: Audit the Fed Link.

To understand the proposal one must understand the current Congressional authority over the Federal Reserve is surprisingly limited. The current law does require an “audit” but it also provides a list of issues that Congress cannot examine. Incredibly, the limitations are extremely broad and dangerous, including the following:

(1) transactions for or with a foreign central bank, government of a foreign country, or nonprivate international financing organization;

(2) deliberations, decisions, or actions on monetary policy matters, including discount window operations, reserves of member banks, securities credit, interest on deposits, and open market operations;

(3) transactions made under the direction of the Federal Open Market Committee; or

(4) a part of a discussion or communication among or between members of the Board of Governors and officers and employees of the Federal Reserve System related to clauses (1)–(3) of this subsection.

31 U.S.C. § 714.

The bill changes the existing law to require a full and straightforward audit of the Federal Reserve, which is an organization that controls the United States monetary and banking systems.

The Bill itself is very simple and straightforward. It removes the unconscionable limits. The text of the proposed law fits in a couple paragraphs. It is quoted below:

AUDIT REFORM AND TRANSPARENCY FOR THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM.

(a) In General- Subsection (b) of section 714 of title 31, United States Code, is amended by striking all after ‘shall audit an agency’ and inserting a period.

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

(e) Audit and Report of the Federal Reserve System-

(1) IN GENERAL- The audit of the Board of Governors of the Federal Reserve System and the Federal reserve banks under subsection (b) shall be completed before the end of 2010.

(2) REPORT-

(A) REQUIRED- A report on the audit referred to in paragraph (1) shall be submitted by the Comptroller General to the Congress before the end of the 90-day period beginning on the date on which such audit is completed and made available to the Speaker of the House, the majority and minority leaders of the House of Representatives, the majority and minority leaders of the Senate, the Chairman and Ranking Member of the committee and each subcommittee of jurisdiction in the House of Representatives and the Senate, and any other Member of Congress who requests it.

(B) CONTENTS- The report under subparagraph (A) shall include a detailed description of the findings and conclusion of the Comptroller General with respect to the audit that is the subject of the report, together with such recommendations for legislative or administrative action as the Comptroller General may determine to be appropriate.

GovTrack.us, HR 1207.