Rep. Scott Garrett (R-N.J.) has proposed legislation aimed at forcing the Federal Reserve Board to be more accommodating to Congress.
The legislation would require the Fed chairman to sit and take questions at congressional hearings until either all questions have been exhausted, or the end of the business day is reached.
The Federal Reserve Accountability and Transparency (FRAT) Act, H.R. 3928, is Garrett's answer to what he says is an increasingly non-responsive Federal Reserve. The bill was introduced just days before Janet Yellen is set to take over from current Fed Chairman Ben Bernanke.
Garrett, who chairs the House Financial Services Subcommittee on Capital Markets and Government-Sponsored Entities, is proposing several explicit deadlines for the Fed's compliance with congressional requests, starting with requests for a hearing. The bill says the Fed must respond within three days of a request for a hearing, and says the Fed must offer a written explanation if it cannot meet on a certain date.
While Fed chairmen are often excused from hearings after a certain time, the bill says specifically that the chair must be more accommodating. "During any appearance before a committee of the Congress, the Chairman or any other official or employee of the Board of Governors making such appearance shall remain as long as members of the committee have questions, but no later than 5 pm," the bill reads.
If members ask questions that the Fed needs to reply to in writing, those replies would be due within six weeks. Garrett says the Fed sometimes takes four to six months to send back these replies.
The bill codifies the length of the Fed's "blackout" period, which is the time around monetary policy meetings that Fed officials aren't allowed to talk in public. Garrett says that policy is good, but says the Fed too often uses it to dodge congressional questions.
His bill says the blackout period would run from about one week before the policy meeting, to the day after, and also says the Fed would still be allowed to talk to Congress on other issues.
The bill also makes sweeping changes to the Fed's rulemaking process. It would require cost-benefit analyses on all Fed rules, as well as reporting to Congress on all pending rulemakings.
Garrett is proposing several internal changes dealing with pay and ethics within the Fed. The bill says Fed staff pay cannot exceed 99 percent of the chairman's pay, and requires the Fed to post financial disclosure information on its workers online. New limits on the ability of Fed staff to trade certain securities would also take effect.