Federal Reserve Reform Act of 1995

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Federal Reserve Reform Act of 
1995''.

SEC. 2. MEMBERSHIP OF THE FEDERAL OPEN MARKET ADVISORY COMMITTEE.

    (a) In General.--Section 12A(a) of the Federal Reserve Act (12 
U.S.C. 263(a)) is amended to read as follows:
    ``(a) Establishment of Advisory Committee.--
            ``(1) In general.--There is established a Federal Open 
        Market Advisory Committee (hereafter in this section referred 
        to as the `Advisory Committee'), which shall consist of the 
        presidents of the Federal Reserve banks.
            ``(2) Chairperson.--The president of the Federal Reserve 
        Bank of New York shall serve as the chairperson of the Advisory 
        Committee.
            ``(3) Meetings.--The meetings of the Advisory Committee 
        shall be held in Washington, District of Columbia, not less 
        than 4 times each year upon the call of the Board.
            ``(4) Duties.--The Advisory Committee shall advise the 
        Board on the conduct of open-market operations.''.
    (b) Conforming Amendments.--
            (1) Federal reserve act.--The Federal Reserve Act (12 
        U.S.C. 221 et seq.) is amended--
                    (A) in section 2A (12 U.S.C. 225a)--
                            (i) by striking ``and the Federal Open 
                        Market Committee'' each place it appears; and
                            (ii) in the sixth sentence, by striking 
                        ``determine'' and inserting ``determines'';
                    (B) in the tenth undesignated paragraph of section 
                10 (12 U.S.C. 247a)--
                            (i) by striking ``and by the Federal Open 
                        Market Committee''; and
                            (ii) by striking ``and the Committee'';
                    (C) in section 12A (12 U.S.C. 263)--
                            (i) in subsection (b)--
                                    (I) by striking ``Committee'' each 
                                place it appears and inserting 
                                ``Board''; and
                                    (II) by inserting ``Regulations.--
                                '' before ``No Federal Reserve''; and
                            (ii) in subsection (c), by inserting 
                        ``Accommodation of Commerce and Business.--'' 
                        before ``The time''; and
                    (D) in section 14(b)(2) (12 U.S.C. 355(2)), by 
                striking ``Federal Open Market Committee'' and 
                inserting ``Board''.
            (2) International lending supervision act of 1983.--Section 
        911(a)(3)(C) of the International Lending Supervision Act of 
        1983 (12 U.S.C. 3910(a)(3)(C)) is amended by striking ``Federal 
        Open Market Committee'' and inserting ``Board of Governors of 
        the Federal Reserve System''.

SEC. 3. CONSULTATION BETWEEN THE BOARD OF GOVERNORS AND THE SECRETARY 
              OF THE TREASURY, THE DIRECTOR OF THE OMB, AND THE 
              CHAIRMAN OF THE CEA.

    Section 2A of the Federal Reserve Act (12 U.S.C. 225a) (as amended 
by section 2(b)(1)(A)) is amended--
            (1) in the first sentence, by striking ``The Board of 
        Governors'' and inserting the following:
    ``(a) In General.--The Board of Governors''; and
            (2) by adding at the end the following new subsection:
    ``(b) Consultation Required.--The Board of Governors shall meet and 
consult with the Secretary of the Treasury, the Director of the Office 
of Management and Budget, and the chairman of the Council of Economic 
Advisors--
            ``(1) during the 30-day period immediately preceding the 
        date on which each report required under     the second 
sentence of subsection (a) is submitted to the Congress by the Board of 
Governors; and
            ``(2) during the 30-day period beginning on the date which 
        is 100 days immediately preceding the date by which the 
        President is required to submit the budget under section 
        1105(a) of title 31, United States Code.''.

SEC. 4. APPOINTMENT OF THE CHAIRMAN AND VICE CHAIRMAN.

    (a) Appointment of the Chairman and Vice Chairman.--The second 
undesignated paragraph of section 10 of the Federal Reserve Act (12 
U.S.C. 242) is amended by striking the third sentence and inserting the 
following: ``The President shall appoint, by and with the advice and 
consent of the Senate, one member of the Board to serve as Chairman. 
The term of such member as Chairman shall expire on January 31 of the 
first calendar year beginning after the end of the term of the 
President who appointed such member as Chairman. If a member appointed 
as Chairman does not complete the term of such office as established in 
the preceding sentence, the President shall appoint, by and with the 
advice and consent of the Senate, another member to complete the 
unexpired portion of such term. The President shall also appoint, by 
and with the advice and consent of the Senate, one member of the Board 
to serve as Vice Chairman for a term of 4 years. The Chairman and the 
Vice Chairman may each serve after the end of their respective terms 
until a successor has taken office.''.
    (b) Performance of Duties.--The second undesignated paragraph of 
section 10 of the Federal Reserve Act (12 U.S.C. 242) (as amended by 
subsection (a) of this section) is amended by inserting after the 
seventh sentence the following: ``In the event of the absence or 
unavailability of the Chairman, the Vice Chairman or (in the Vice 
Chairman's absence) another member of the Board may be designated by 
the Chairman to perform the duties of the office of the Chairman. If a 
vacancy occurs in the office of the Chairman, the Vice Chairman shall 
perform the duties of the Chairman until a successor takes office. If a 
vacancy occurs in the office of the Vice Chairman while the office of 
the Chairman is vacant, the member of the Board with the most years of 
service on the Board shall perform the duties of the Chairman until a 
successor takes office.''.
    (c) Effective Date.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall take effect on the date 
        of enactment of this Act.
            (2) Current chairman to complete term.--Notwithstanding the 
        amendment made by subsection (a), any member who holds the 
        office of Chairman of the Board of Governors of the Federal 
        Reserve System on the date of enactment of this Act shall 
        continue in such office during the remainder of the term to 
        which such member was appointed.

SEC. 5. DISCLOSURE OF INTERMEDIATE TARGETS.

    Section 12A(b) of the Federal Reserve Act (12 U.S.C. 263(b)) (as 
amended by section 2(b)(1)(C)(i)) is amended by adding at the end the 
following: ``Notwithstanding any other provision of law, each change, 
of any nature whatsoever, in the intermediate targets for monetary 
policy, which change is adopted by the Board, shall be disclosed to the 
public on the date on which such change is adopted. For purposes of 
this subsection, the term `intermediate targets' means any policy 
objectives regarding monetary aggregates, credit aggregates, prices, 
interest rates, or bank reserves.''.

SEC. 6. AUDIT OF FINANCIAL TRANSACTIONS BY COMPTROLLER GENERAL.

    Section 714(b) of title 31, United States Code, is amended--
            (1) in paragraph (1), by inserting ``or'' at the end; and
            (2) by striking paragraphs (2) through (4) and inserting 
        the following:
            ``(2) memoranda, letters, or other written communications 
        between or among members of the Board of Governors of the 
        Federal Reserve System or officers or employees of the Federal 
        Reserve System relating to any transaction described in 
        paragraph (1).''.

SEC. 7. BOARD SUBJECT TO BUDGET PROCESS.

    Section 1105 of title 31, United States Code, is amended by adding 
at the end the following new subsection:
    ``(h) Federal Reserve Board Budget Treatment.--Not later than 
October 16 of each year, the estimated receipts and proposed 
expenditures of the Board of Governors of the Federal Reserve System 
and all Federal Reserve banks for the current year and the next 2 
succeeding years shall be transmitted by the Board to the President. 
The President shall transmit to the Congress the information received 
in accordance with this subsection, without change, together with the 
budget transmitted to the Congress under subsection (a).''.

Summary: Federal Reserve Reform Act of 1995 - Amends the Federal Reserve Act to abolish the current Federal Open Market Committee, on which the Board of Governors of the Federal Reserve System sits, and replace it with a Federal Open Market Advisory Committee, on which the Board does not sit, which shall advise the Board on the conduct of open-market operations. Requires the Board to meet and consult with the Secretary of the Treasury, the Director of the Office of Management and Budget, and the chairman of the Council of Economic Advisers during specified periods. Revises the term of the Chairman of the Board to expire on January 31 of the first calendar year beginning after the end of the term of the President who appointed the Chairman. Provides for performance of the duties of Chairman and Vice Chairman in the event of absence, unavailability, or vacancy. Mandates that each Board-adopted change in the intermediate targets for monetary policy be disclosed to the public upon its date of adoption. Amends Federal law to: (1) instruct the Comptroller General to audit written communications by members of the Board or officers or employees of the Federal Reserve System with respect to financial transactions. And (2) mandate an annual transmittal to the President and the Congress of all estimated receipts and proposed expenditures of the Board and all Federal Reserve banks for the current year and the next two succeeding years.