I 

111TH CONGRESS 

1ST SESSION H. R. 3858 

To amend the Federal Reserve Act to alter the terms and conditions applicable to members of the Board of Governors of the Federal Reserve 

System, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

OCTOBER 20, 2009 

Ms. KAPTUR introduced the following bill; which was referred to the 

Committee on Financial Services 

A BILL 

To amend the Federal Reserve Act to alter the terms and 

conditions applicable to members of the Board of Governors of the Federal Reserve System, and for other 

purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Democratizing the 

5 Federal Reserve System Act of 2009’’. 

6 SEC. 2. AMENDMENTS TO FEDERAL RESERVE ACT. 

7 (a) REDUCTION IN LENGTH OF TERMS.— 


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1 (1) The first sentence of the first undesignated 

2 paragraph of section 10 of the Federal Reserve Act 

3 (12 U.S.C. 241) is amended by striking ‘‘fourteen 

4 years’’ and inserting ‘‘7 years’’. 

5 (2) The 2nd sentence of the 2nd undesignated 

6 paragraph of section 10 of the Federal Reserve Act 

7 (12 U.S.C. 242) is amended by striking ‘‘fourteen 

8 years’’ the 2nd place such term appears and insert9 ing ‘‘7 years’’. 

10 (3) The ultimate sentence of the 2nd undesig11 nated paragraph of section 10 of the Federal Re12 serve Act (12 U.S.C. 242) is amended by striking 

13 ‘‘fourteen years’’ and inserting ‘‘7 years’’. 

14 (b) INCREASE IN POST-SERVICE RESTRICTION.—The 

15 first sentence of the 2nd undesignated paragraph of sec16 tion 10 of the Federal Reserve Act (12 U.S.C. 242) is 

17 amended by striking ‘‘two years’’ and inserting ‘‘4 years’’. 

18 (c) ONGOING SERVICE ON BOARD REQUIREMENT

19 FOR CHAIRMAN AND VICE CHAIRMAN.— 

20 (1) CHAIRMAN.—The 3rd sentence of the 2nd 

21 undesignated paragraph of section 10 of the Federal 

22 Reserve Act (12 U.S.C. 242) is amended by striking 

23 ‘‘one shall be designated’’ the 1st place such term 

24 appears and inserting ‘‘a member who is currently 

25 serving on the Board and has already served at least 


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1 2 consecutive years on the Board shall be des2 ignated’’. 

3 (2) VICE CHAIRMAN.—The 3rd sentence of the 

4 2nd undesignated paragraph of section 10 of the 

5 Federal Reserve Act (12 U.S.C. 242) is amended by 

6 striking ‘‘one shall be designated’’ the 2nd place 

7 such term appears and inserting ‘‘a member who is 

8 currently serving on the Board and has already 

9 served at least 1 year on the Board, shall be des10 ignated’’. 

11 (d) LIMITATION ON CONTINUING VACANCIES.—The 

12 4th undesignated paragraph of section 10 of the Federal 

13 Reserve Act (12 U.S.C. 244) is amended— 

14 (1) in the ultimate sentence, by inserting ‘‘, be15 fore the end of the 90-day period beginning on the 

16 date such vacancy occurs,’’ after ‘‘shall be ap17 pointed’’; and 

18 (2) by adding at the end the following new sen19 tences: ‘‘If, as of 30 days after the end of such 90- 

20 day period, no nomination has been made by the 

21 President, the chairperson and ranking Member of 

22 the Committees of the House of Representatives and 

23 the Senate which have jurisdiction over this Act, 

24 under the rules of the respective House, the Speaker 

25 and the minority leader of the House of RepresentaVerDate Nov 24 2008 21:50 Oct 21, 2009 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H3858.IH H3858

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1 tives, and the majority leader and minority leader of 

2 the Senate shall jointly create a list of 5 candidates 

3 in rank order to present to the President for consid4 eration for the vacancy. Not later than 30 days after 

5 the transmittal of such list to the President, the 

6 President shall nominate a person, whether from 

7 such list or another person, to fill the vacancy.’’. 

8 (e) AMENDMENTS RELATING TO FEDERAL OPEN

9 MARKET COMMITTEE.— 

10 (1) INCREASE IN FEDERAL RESERVE BANK

11 REPRESENTATION.—The 1st sentence of section 

12 12A(a) of the Federal Reserve Act (12 U.S.C. 263) 

13 is amended by striking ‘‘five’’ and inserting ‘‘6’’. 

14 (2) DISTRIBUTION OF FEDERAL RESERVE BANK

15 MEMBERSHIP.—Section 12A(a) of the Federal Re16 serve Act (12 U.S.C. 263) is amended by striking 

17 the 2nd sentence and inserting the following: ‘‘Such 

18 representatives shall be presidents or first vice presi19 dents of Federal reserve banks and shall be elected 

20 annually as follows: In even numbered calendar 

21 years, from among the presidents and first vice 

22 presidents of the Federal Reserve Banks of Boston, 

23 Kansas City, Philadelphia, San Francisco, Rich24 mond, and St. Louis and in odd numbered calendar 

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1 dents of the Federal Reserve Banks of New York, 

2 Dallas, Chicago, Cleveland, Atlanta, and Min3 neapolis.’’. 

Æ 


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