June 30, 2021

Toomey Blasts Regional Fed Banks for Refusing to Comply with Congressional Request

Lack of Transparency and Accountability May Require a Legislative Solution

Washington, D.C. – U.S. Senate Banking Committee Ranking Member Pat Toomey (R-Pa.) today blasted the San Francisco, Minneapolis, Atlanta, and Boston Federal Reserve Banks for refusing to comply with congressional oversight requests for documents pertaining to their shift toward publishing politically-charged research and engaging in “racial justice” advocacy—activities that are outside the bounds of the Federal Reserve’s mission and statutory mandate.

In letters to each of the four banks, Ranking Member Toomey wrote:

“[Your] refusal to provide any documents responsive to the request is an unacceptable stonewalling of Congress’s need to fully evaluate the recent and sudden departure of the [bank] from its important, nonpartisan, and statutorily defined mission to ‘promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates.’ This is particularly troubling given the various ways in which the [bank] lacks both transparency and accountability in carrying out its statutory mandate.”

On March 29, 2021, Ranking Member Toomey opened an investigation into the recent shift by regional banks of the Federal Reserve System toward publishing politically-charged research on environmental, social, and governance (ESG) topics like global warming and racial justice. In a letter to the San Francisco Fed, Senator Toomey requested a briefing and documents no later than April 9, 2021.

On May 24, 2021, Ranking Member Toomey expanded this investigation, requesting briefings and documents from the Minneapolis, Boston and Atlanta regional Fed banks by June 7, 2021 pertaining to their recent, intense interest in racial justice activism.

To date, not one of the four banks has provided the Ranking Member with any of the requested documents, choosing instead to conceal these documents from both Congress and the American people.

“Transparency and openness are essential in both promoting a greater understanding of the [bank’s] mission and actions and also in maintaining public trust. However, it appears that the [bank] prefers to cloak its activities in secrecy and withhold documents from both Congress and the American people. Unfortunately, it is hard not to infer that the [bank] has something to hide. If the [bank] continues to resist a legitimate congressional oversight request, Congress may need to consider subjecting the [bank] and the other Federal Reserve regional banks to the same transparency and accountability laws imposed on nearly every other federal agency or organization.”

Last month, several news outlets reported the Fed’s Board of Governors recently issued guidance instructing its employees across the U.S. to adopt “bias-free language,” including avoiding using words like “Founding Fathers,” “manmade,” and “singular generic pronouns” such as “he” or “she.”

Additionally, 42 independent economists penned an open letter expressing concern that the Federal Reserve was weakening its credibility and independence by exceeding its mandates with delving into environmental and social policy.