Ahead of Semiannual Monetary Policy Hearing, Scott, Colleagues Press Chair Powell on Federal Reserve’s Spending, Politicization, and Regulatory Reforms
Washington, D.C. – Ahead of the Senate Banking Committee’s hearing on the Federal Reserve’s Semiannual Monetary Policy Report to the Congress, Chairman Tim Scott (R-S.C.) and his colleagues are pressing Chair Jerome Powell on the Federal Reserve’s spending on lavish renovations, the agency’s politicization, and the need to empower newly confirmed Vice Chair for Supervision, Governor Michelle Bowman.
In a letter to Chair Powell, Chairman Scott – along with Sens. Cynthia Lummis (R-Wyo.), Pete Ricketts (R-Neb.), Jim Banks (R-Ind.), Kevin Cramer (R-N.D.), and Bernie Moreno (R-Ohio) – wrote, “Over the course of the Biden administration, Americans suffered from inflation, rising costs, and high interest rates. Families were spending record amounts just to put food on the table, with card and auto loan delinquency rates spiked to their highest levels since the 2008 Financial Crisis. At the same time Americans are struggling to put food on the table, the Federal Reserve has been spending billions of dollars on the renovation of two of its offices in Washington, D.C. Multiple media outlets have reported that these renovated buildings will include amenities that average Americans could never dream of – rooftop garden terraces, ornate water features, new elevators that drop board members off directly in their VIP dining suite, use of white marble, rooftop Italian beehives, and a private art collection in the basement.”
The senators continued, “We appreciate that the Federal Reserve announced on June 23rd that reputational risk will no longer be a component of examination programs in its supervision of banks. Removing reputational risk from bank supervision is a necessary first step in ending politicization at the Federal Reserve. But the agency needs to ensure that examiners implement this change so that politics is truly rooted out of bank supervision. In addition to removing politics from Federal Reserve supervision, there is significant work ahead to right-size the regulatory framework for financial institutions. Banks are facing a record number of regulations. Small community banks are especially burdened by compliance costs and are increasingly priced out of growth due to the ever-increasing costs and obligations. The Federal Reserve and other federal financial regulators therefore must streamline and modernize the rules governing financial institutions.”
The senators concluded, “…Vice Chair for Supervision Michelle Bowman’s work reassessing current Federal Reserve regulations and supervisory practices to curb politicization and right-size the regulatory framework for financial institutions will be critical. Vice Chair Bowman has been an important voice on the Federal Reserve Board in pushing back on burdensome rules and regulations that stifle economic opportunity, and we expect that she will continue this vital work as Vice Chair for Supervision.”
To read the full letter, click here.
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