U.S. Rep. French Hill (R-AR) on Oct. 19 sponsored legislation to instill accountability at the Federal Reserve amid the central bank breaching $100 billion in net losses.
Rep. Hill reintroduced the Federal Reserve Loss Transparency Act, H.R. 5993. The bill would prevent the Federal Reserve from transferring its earnings to the Consumer Financial Protection Bureau (CFPB) if the Fed incurs an operating loss on its balance sheet. The CFPB is not funded through congressional appropriations but rather is funded from the earnings of the Fed, the congressman’s office explained.
“Since I introduced this legislation last September, the Federal Reserve has posted over $100 billion in operating losses, and the number continues to soar. These growing losses to American taxpayers are rooted in our central bank’s overreliance on buying government bonds and mortgage-backed securities as an emergency monetary policy tool,” Rep. Hill said.
H.R. 5993 would also require the Fed to calculate its net earnings and total capital in accordance with U.S. generally accepted accounting principles.
“With billions in real losses and over a trillion in unrealized, mark-to-market losses, the Federal Reserve should focus on responsible monetary policy instead of funding the Consumer Financial Protection Bureau (CFPB), which should be put on congressional appropriations,” the congressman said.
Companion legislation to H.R. 5993 has been introduced in the U.S. Senate by Sen. Bill Hagerty (R-TN) as S. 3095.