Exclusive: Republican U.S. Senator Rick Scott, Democrat Warren unveil Fed oversight bill

[BumRushDaShow]

Source: Reuters

WASHINGTON, March 22 (Reuters) - A conservative Republican and a progressive Democrat in the U.S. Senate are introducing legislation on Wednesday to replace the Federal Reserve's internal watchdog with one appointed by the president, aiming to tighten bank supervision following the failures of Silicon Valley Bank and Signature Bank.

Republican Rick Scott and Democrat Elizabeth Warren blamed the collapse of the two banks on regulatory failures at the U.S. central bank, which has operated up to now with an internal inspector general who reports to the Fed board. "Our legislation fixes that by establishing a presidentially-appointed, Senate-confirmed inspector general at the Fed, like every other major government agency," Scott said in a joint release with Warren.

Warren said this month's banking upheavals "have underscored the urgent need for a truly independent inspector general to hold Fed officials accountable for any lapses or wrongdoing." The Federal Reserve had no comment on the measure. The legislation, introduced on Wednesday, would replace the Fed's inspector general with an independent IG who would oversee the Federal Reserve and the Consumer Financial Protection Bureau. The CFPB, responsible for consumer protection within the financial sector, is technically housed within the Fed system but operates entirely on its own, save for one key factor: It is funded by transfers from the Fed.

Warren played a key role in setting up the CFPB under Democratic President Barack Obama following the 2007-2008 financial crisis. The U.S. Supreme Court last month agreed to hear a case challenging the CFPB's funding structure, which some conservatives argue violates the U.S. Constitution, The cooperation between Scott and Warren, who usually inhabit opposite poles of the political spectrum, could be the start of a new bipartisan push on banking.

Read more: https://www.reuters.com/markets/us/republican-us-senator-rick-scott-democrat-warren-unveil-fed-oversight-bill-2023-03-22/

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The draft legislation is here. (PDF)

[bucolic_frolic]

1. Fed's problems stem from Bernanke, but he had little choice with the mess he inherited

from Greenspoon's housing crisis. Loose money for 20 years, with 2 extra heavy loose periods, 2009 and 2020-21, distorted money, finance, capitalism, and banks. Economist John's Hussman's latest commentary (he does not allow links or posts, so use the Google if you'd like 4 hours of reading) states the banks have too much money, and it's all tied up in T-Bonds so they have no money to lend and no capital to handle a bank run.

[peppertree]

2. They remind me of a greedy old lady who said: I'm afraid I cant help; all my money's tied up in cash

[cstanleytech]

5. The Republican working to undermine the middle class for 50+ years has also had a negative impact

to our country and contributed the most to our economic problems.

[Raven123]

3. Another Senate confirmation position that may not be filled. Don't get it

[cstanleytech]

4. Presidents need to stay the hell away from the Federal Reserve.

[groundloop]

6. Not sure I agree with this.... think of the caliber of individual 45* might have appointed.

Plus I trust Rick Scott about as far as I can throw him.

[Mr.Bill]

7. What if Ron DeSantis got elected president and

republicans took the Senate. Do we want a DeSantis appointee overseeing the Federal Reserve?