Warren, Bipartisan Majority of Senators Support a Truly Independent Fed Inspector General
Warren: “For years, the Fed has rebuffed congressional oversight, and for years Fed officials have been caught up in ethics scandals without any accountability … the Fed’s watchdog should be truly independent and empowered to call out abuses.”
Amendment, which received support from a majority of Senators, would take effect in 2029
Washington, D.C. – Today on the Senate floor, U.S. Senator Elizabeth Warren (D-Mass.), Ranking Member of the Senate Banking, Housing, and Urban Affairs Committee, urged her Senate colleagues to support Senator Rick Scott’s (R-Fla.) bipartisan amendment to require a presidentially appointed and Senate-confirmed Inspector General (IG) to the Board of Governors of the Federal Reserve System.
Ranking Member Warren previously introduced legislation with Senator Rick Scott that would have required a truly independent IG at both the Fed and the Consumer Financial Protection Bureau, like all other major agencies’ inspectors general. Under current law, the Chairman of the Federal Reserve selects the IG, and the Board of Governors oversees, sets the pay of, and can remove the IG. This structure creates a severe structural conflict of interest, which has undermined the public’s confidence in the Fed in recent years.
Below are Ranking Member Warren’s remarks as delivered:
Senator Warren: Mr. President, I rise to support Senator Scott’s bill that would increase oversight of the Federal Reserve.
I believe in Fed independence so the Fed can do its work setting interest rates and maximizing employment. But independence does not mean insulation from following the rules, especially ethics rules.
For years, the Fed has rebuffed congressional oversight, and for years Fed officials have been caught up in ethics scandals without any accountability.
Unlike virtually every other major federal agency, the Fed hires and fires—and sets the salary—for its own Inspector General.
That means that in 2021, when high-level Fed officials were embroiled in a scandal involving financial trades they made during the COVID pandemic, the Fed’s own, in-house IG conducted the only investigation—and said essentially, “Nothing to see here.”
Maybe that’s right, but the Fed’s watchdog should be truly independent and empowered to call out abuses.
I urge a yes vote.
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