I 

113TH CONGRESS 

1ST SESSION H. R. 1174 

To amend the Federal Reserve Act to improve the functioning and transparency of the Board of Governors of the Federal Reserve System and 

the Federal Open Market Committee, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 14, 2013 

Mr. BRADY of Texas (for himself, Mrs. BACHMANN, Mr. BENTIVOLIO, Mrs. 

BLACKBURN, Mr. BONNER, Mr. BRIDENSTINE, Mr. BROUN of Georgia, 

Mr. BURGESS, Mr. COLE, Mr. CONAWAY, Mr. DUFFY, Mr. DUNCAN of 

South Carolina, Mr. FLORES, Ms. FOXX, Mr. FRANKS of Arizona, Mr. 

GOHMERT, Mr. GOWDY, Mr. GRAVES of Missouri, Mr. HUIZENGA of 

Michigan, Ms. JENKINS, Mr. JOHNSON of Ohio, Mr. SAM JOHNSON of 

Texas, Mr. JONES, Mr. JORDAN, Mr. KINGSTON, Mr. LABRADOR, Mr. 

LAMALFA, Mr. LAMBORN, Mr. LANCE, Mr. LANKFORD, Mr. LONG, Mr. 

LUCAS, Mr. LUETKEMEYER, Mrs. LUMMIS, Mr. MARCHANT, Mr. 

MCCLINTOCK, Mr. MILLER of Florida, Mr. MULLIN, Mr. MULVANEY, Mr. 

NEUGEBAUER, Mr. PEARCE, Mr. PETRI, Mr. PITTS, Mr. RIBBLE, Mr. 

ROKITA, Mr. SCALISE, Mr. SMITH of Texas, Mr. STUTZMAN, Mr. THORNBERRY, Mr. WALBERG, Mr. WEBER of Texas, and Mr. WOODALL) introduced the following bill; which was referred to the Committee on Financial Services 

A BILL 

To amend the Federal Reserve Act to improve the functioning and transparency of the Board of Governors of 

the Federal Reserve System and the Federal Open Market Committee, 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, 

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1 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

2 (a) SHORT TITLE.—This Act may be cited as the 

3 ‘‘Sound Dollar Act of 2013’’. 

4 (b) TABLE OF CONTENTS.—The table of contents for 

5 this Act is as follows: 

Sec. 1. Short title; table of contents. 

TITLE I—SINGLE MANDATE FOR PRICE STABILITY ACT 

Sec. 101. Findings. 

Sec. 102. Price stability mandate. 

TITLE II—FINANCIAL STABILITY AND MORAL HAZARD 

MITIGATION ACT 

Sec. 201. Findings. 

Sec. 202. Lender-of-last-resort policy. 

TITLE III—DIVERSIFYING THE FEDERAL OPEN MARKET 

COMMITTEE TO REFLECT A 21ST CENTURY ECONOMY ACT 

Sec. 301. Findings. 

Sec. 302. Federal Open Market Committee membership. 

TITLE IV—DEMYSTIFICATION OF MONETARY POLICY DECISIONS 

ACT 

Sec. 401. Findings. 

Sec. 402. Release of transcripts. 

TITLE V—EXCHANGE RATE RESPONSIBILITY ACT 

Sec. 501. Findings. 

Sec. 502. Report on the effect of exchange rate policy. 

Sec. 503. Renaming of Exchange Stabilization Fund. 

Sec. 504. Conversion to all-SDR Fund. 

TITLE VI—CREDIT ALLOCATION NEUTRALITY ACT 

Sec. 601. Findings. 

Sec. 602. Limitation on certain non-emergency security purchases. 

TITLE VII—BUREAU OF CONSUMER FINANCIAL PROTECTION 

FUNDING ACT 

Sec. 701. Findings. 

Sec. 702. Bureau of Consumer Financial Protection Funding. 

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1 TITLE I—SINGLE MANDATE FOR 

2 PRICE STABILITY ACT 

3 SEC. 101. FINDINGS. 

4 The Congress finds the following: 

5 (1) Monetary policy can only affect the level of 

6 employment in the short term because nonmonetary 

7 factors determine the level of employment in the 

8 long term. At best, the Federal Reserve may tempo9 rarily increase the level of employment through mon10 etary policy, but such efforts risk the possibility of 

11 price inflation and increased business cycle volatility 

12 in the future. However, the Federal Reserve can 

13 achieve price stability in the long term through mon14 etary policy. Price stability is desirable because both 

15 price inflation and price deflation damage the U.S. 

16 economy. Therefore, to maximize long-term economic 

17 growth and achieve the highest sustainable level of 

18 real output and employment, price stability should 

19 be the objective of monetary policy. 

20 (2) Countries whose central bank has a single 

21 mandate for price stability generally have a better 

22 record of achieving stable prices than countries 

23 whose central bank has a mandate that gives equal 

24 weight to other objectives such as maximum employ25 ment or low interest rates. 

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1 (3) In general, an overly accommodative mone2 tary policy inflates both asset prices and prices for 

3 goods and services. However, an overly accommoda4 tive monetary policy may sometimes cause a 

5 misallocation of capital that inflates asset prices dis6 proportionately, creating unsustainable bubbles in 

7 asset prices, while prices indices for goods and serv8 ices do not register significant price inflation. When 

9 asset bubbles burst, many investments must be liq10 uidated at considerable cost to the U.S. economy in 

11 terms of lower real output and employment. 

12 (4) Price stability cannot always be measured 

13 solely through price indices for goods and services 

14 since such indices exclude changes in asset prices. 

15 Therefore, the Federal Reserve should monitor (A) 

16 the prices of, and the expected returns from, major 

17 asset classes (including equities, residential real es18 tate, commercial and industrial real estate, agricul19 tural real estate, gold and other commodities, cor20 porate bonds, U.S. Government bonds, State and 

21 local government bonds, and other securities), (B) 

22 the value of the U.S. dollar relative to other cur23 rencies, and (C) the value of the United States dol24 lar relative to gold, as metrics to determine whether 

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1 the Federal Reserve’s monetary policy is consistent 

2 with long-term price stability. 

3 SEC. 102. PRICE STABILITY MANDATE. 

4 (a) IN GENERAL.—Section 2A of the Federal Reserve 

5 Act is amended— 

6 (1) by striking ‘‘maintain long run growth of 

7 the monetary and credit aggregates commensurate 

8 with the economy’s long run potential to increase 

9 production, so as to promote effectively the goals of 

10 maximum employment, stable prices, and moderate 

11 long-term interest rates’’ and inserting ‘‘pursue the 

12 goal of long-term price stability, in order to achieve 

13 the maximum sustainable rate of output growth and 

14 the maximum level of employment through time’’; 

15 (2) by striking ‘‘The Board of Governors’’ and 

16 inserting the following: 

17 ‘‘(a) IN GENERAL.—The Board of Governors’’; and 

18 (3) by adding at the end the following: 

19 ‘‘(b) PRICE STABILITY METRICS.— 

20 ‘‘(1) IN GENERAL.—The Board of Governors of 

21 the Federal Reserve System and the Federal Open 

22 Market Committee shall— 

23 ‘‘(A) define the term ‘long-term price sta24 bility’ for purposes of subsection (a); and 

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1 ‘‘(B) establish metrics that the Board and 

2 the Committee will use to evaluate whether 

3 long-term price stability is being achieved. 

4 ‘‘(2) ESTABLISHMENT OF METRICS.—In estab5 lishing the metrics described under paragraph 

6 (1)(B), the Board and Committee shall— 

7 ‘‘(A) take into consideration price indices 

8 of goods and services; and 

9 ‘‘(B) evaluate, on an ongoing basis— 

10 ‘‘(i) whether such metrics are com11 prehensively reflecting price movements in 

12 the economy; and 

13 ‘‘(ii) whether any price movements not 

14 captured by the price indices of goods and 

15 services are causing a significant 

16 misallocation of capital in the United 

17 States economy. 

18 ‘‘(3) METRIC EVALUATION.—The Board and 

19 Committee shall, with respect to the evaluation proc20 ess required pursuant to paragraph (2)(B), mon21 itor— 

22 ‘‘(A) the prices of, and the expected re23 turns from, major asset classes (including equi24 ties, residential real estate, commercial and in25 dustrial real estate, agricultural real estate, 

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1 commodities, corporate bonds, State and local 

2 government bonds, and other securities) and 

3 the allocation of capital in financial markets 

4 and the broader economy; 

5 ‘‘(B) the value of the United States dollar 

6 relative to other currencies; and 

7 ‘‘(C) the value of the United States dollar 

8 relative to gold. 

9 ‘‘(4) PUBLIC DISCLOSURE; REPORT TO THE

10 CONGRESS.—The Board and the Committee shall, 

11 with respect to the definition of long-term price sta12 bility and the establishment of metrics set pursuant 

13 to paragraph (1)— 

14 ‘‘(A) make such definition and metrics 

15 available to the public on a website maintained 

16 by the Board or the Committee; and 

17 ‘‘(B) each time such definition and metrics 

18 are set or revised, issue a report to the Con19 gress stating such definition and metrics.’’. 

20 (b) ADDITIONAL EVALUATIONS AND DETERMINA21 TIONS INCLUDED IN SEMI-ANNUAL REPORT TO CON22 GRESS.—Section 2B(b) of the Federal Reserve Act is 

23 amended— 

24 (1) by striking ‘‘containing a discussion’’ and 

25 inserting the following: 

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1 ‘‘containing— 

2 ‘‘(1) a discussion’’; 

3 (2) by striking the period and inserting a semi4 colon; and 

5 (3) by adding at the end the following: 

6 ‘‘(2) the results of the evaluation process con7 ducted pursuant to section 2A(b)(2)(B); 

8 ‘‘(3) a determination of whether the goal of 

9 long-term price stability is being met and, if such 

10 goal is not being met, an explanation of why the goal 

11 is not being met and the steps that the Board and 

12 the Federal Open Market Committee will take to en13 sure that the goal is met in the future; and 

14 ‘‘(4) a description of the main monetary policy 

15 instruments used by the Board and the Federal 

16 Open Market Committee and a description of the 

17 strategy of the Board and the Committee with re18 spect to using such instruments to achieve the goal 

19 of long-term price stability.’’. 

20 TITLE II—FINANCIAL STABILITY 

21 AND MORAL HAZARD MITIGA22 TION ACT 

23 SEC. 201. FINDINGS. 

24 The Congress finds the following: 

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1 (1) The Federal Reserve performs an essential 

2 function for financial stability by serving as lender 

3 of last resort in order to— 

4 (A) prevent the unnecessary failures of 

5 otherwise solvent United States banks and 

6 other financial institutions; 

7 (B) reduce the likelihood of financial con8 tagion and disruptions in United States finan9 cial markets; and 

10 (C) minimize any adverse effects on real 

11 output and employment in the United States 

12 economy. 

13 (2) In acting as the lender of last resort, the 

14 Federal Reserve, may— 

15 (A) buy debt securities at fair market 

16 value; or 

17 (B) provide short-term credit, secured by 

18 appropriate collateral in proper margin, to oth19 erwise solvent banks and other financial institu20 tions that encounter funding difficulties during 

21 a financial crisis. 

22 (3) Nevertheless, in its nearly 100-year history, 

23 the Federal Reserve has never clearly articulated its 

24 lender-of-last-resort policy. 

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1 (4) The absence of an official lender-of-last-re2 sort policy has led to— 

3 (A) increased economic uncertainty be4 cause no one knows with certainty how the Fed5 eral Reserve may behave; 

6 (B) financially distressed firms seeking po7 litical solutions in the form of pressure from 

8 Congress or the Administration being placed on 

9 the Federal Reserve to act to save them; and 

10 (C) a moral hazard problem from financial 

11 institutions taking greater risks and increasing 

12 leverage based upon assumptions of how the 

13 Federal Reserve will act, though there is no for14 mal statement assuring how the Federal Re15 serve will act. 

16 (5) By establishing a formal lender-of-last-re17 sort policy, the Federal Reserve would decrease un18 certainty in the market during times of financial cri19 sis and mitigate the moral hazards created by recent 

20 bailouts. 

21 (6) An official lender-of-last-resort policy should 

22 provide that once a financial crisis has dissipated, 

23 the Federal Reserve should, in an orderly way, sell 

24 any debt securities that— 

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1 (A) the Federal Reserve acquired acting as 

2 lender of last resort; and 

3 (B) the Federal Reserve does not normally 

4 own for its System Account. 

5 (7) Further, to reduce moral hazard, the Fed6 eral Reserve’s lender-of-last-resort policy should 

7 make clear that credit in any form will not be pro8 vided to insolvent banks or other financial institu9 tion. 

10 SEC. 202. LENDER-OF-LAST-RESORT POLICY. 

11 (a) IN GENERAL.—Not later than the end of the 1- 

12 year period beginning on the date of the enactment of this 

13 Act, the Board of Governors of the Federal Reserve Sys14 tem shall clearly articulate the Board’s lender-of-last-re15 sort policy. 

16 (b) CONSULTATION.—In articulating the policy re17 quired under subsection (a), the Board of Governors shall 

18 consult with— 

19 (1) the Federal Reserve bank presidents; 

20 (2) the Comptroller of the Currency; 

21 (3) the Chairperson of the Federal Deposit In22 surance Corporation; 

23 (4) the Securities and Exchange Commission; 

24 (5) the Commodity Futures Trading Commis25 sion; and 

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1 (6) such other persons with expertise in finan2 cial services regulation and monetary policy as the 

3 Board of Governors may determine appropriate. 

4 TITLE III—DIVERSIFYING THE 

5 FEDERAL OPEN MARKET 

6 COMMITTEE TO REFLECT A 

7 21ST CENTURY ECONOMY ACT 

8 SEC. 301. FINDINGS. 

9 The Congress finds the following: 

10 (1) The Federal Reserve Act delineates specific 

11 requirements for the seven governors charged with 

12 oversight of the Federal Reserve System. 

13 (2) In a reflection of the Federal Reserve Sys14 tem’s decentralized structure that broadly distrib15 utes power and responsibility across the Nation, the 

16 Act mandates that the presidentially appointed gov17 ernors come from a wide range of geographic loca18 tions and professional backgrounds. Specifically, the 

19 first undesignated paragraph under section 10 of the 

20 Federal Reserve Act states that ‘‘In selecting the 

21 members of the Board, not more than one of whom 

22 shall be selected from any one Federal Reserve Dis23 trict, the President shall have due regard to a fair 

24 representation of the financial, agricultural, indusmstockstill on DSK4VPTVN1PROD with BILLS

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1 trial, and commercial interests and geographical di2 visions of the country.’’. 

3 (3) The Federal Open Monetary Committee 

4 consists of members of the Board of Governors and 

5 the President or Vice President of the Federal Re6 serve Bank of New York on a permanent basis and 

7 rotates voting membership among the remaining Re8 gional Reserve Banks. 

9 (4) The existing structure of the Federal Open 

10 Market Committee places too much authority in the 

11 hands of Washington and New York at the expense 

12 of the remainder of the United States. 

13 (5) Monetary policy should be conducted in the 

14 interest of all Americans and that policy goal is best 

15 achieved by a Federal Open Market Committee that 

16 provides greater representation and voice in policy 

17 decisions to the entire Nation as represented by the 

18 Regional Reserve Banks. This objective is best 

19 achieved by reforming the voting membership of the 

20 Federal Open Market Committee to include all Re21 gional Reserve Banks on a permanent basis. 

22 SEC. 302. FEDERAL OPEN MARKET COMMITTEE MEMBER23 SHIP. 

24 Section 12A(a) of the Federal Reserve Act (12 

25 U.S.C. 263(a)) is amended— 

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1 (1) by striking ‘‘five representatives of the Fed2 eral Reserve banks to be selected as hereinafter pro3 vided.’’ and inserting ‘‘1 representative from each of 

4 the Federal Reserve banks.’’; and 

5 (2) by striking ‘‘and, beginning with the elec6 tion for the term commencing March 1, 1943, shall 

7 be elected annually as follows: One by the board of 

8 directors of the Federal Reserve Bank of New York, 

9 one by the boards of directors of the Federal Re10 serve Banks of Boston, Philadelphia, and Richmond, 

11 one by the boards of directors of the Federal Re12 serve Banks of Cleveland and Chicago, one by the 

13 boards of directors of the Federal Reserve Banks of 

14 Atlanta, Dallas, and St. Louis, and one by the 

15 boards of directors of the Federal Reserve Banks of 

16 Minneapolis, Kansas City, and San Francisco. In 

17 such elections each board of directors shall have one 

18 vote; and the details of such elections may be gov19 erned by regulations prescribed by the committee, 

20 which may be amended from time to time.’’ and in21 serting ‘‘and shall be elected by the board of direc22 tors of the Federal Reserve bank that they are to 

23 represent.’’. 

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1 TITLE IV—DEMYSTIFICATION OF 

2 MONETARY POLICY DECI3 SIONS ACT 

4 SEC. 401. FINDINGS. 

5 The Congress finds the following: 

6 (1) A more efficient release of transcripts from 

7 the Federal Reserve would result in better guidance 

8 for market participants, and hence more economi9 cally efficient decisionmaking. 

10 (2) According to Federal Reserve Chairman 

11 Ben Bernanke, ‘‘when the monetary policy com12 mittee regularly provides information about objec13 tives, economic outlook, and policy plans, two bene14 fits result: (1) markets will price assets more effi15 ciently, and (2) a closer alignment between market 

16 participants’ expectations about the course of future 

17 short-term interest rates and’’ the views of policy18 makers. 

19 (3) The Federal Reserve is able to release tran20 scripts more efficiently without compromising their 

21 decisionmaking process. 

22 SEC. 402. RELEASE OF TRANSCRIPTS. 

23 Section 12A(a) of the Federal Reserve Act (12 

24 U.S.C. 263(a)) is amended by adding at the end the fol25 lowing: 

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1 ‘‘(d) RELEASE OF TRANSCRIPTS.—The Committee 

2 shall release meeting transcripts to the public not later 

3 than the end of the 3-year period following each meeting.’’. 

4 TITLE V—EXCHANGE RATE 

5 RESPONSIBILITY ACT 

6 SEC. 501. FINDINGS. 

7 The Congress finds as follows: 

8 (1) The Board of Governors of the Federal Re9 serve System and the Federal Open Market Com10 mittee exercise control over the supply of U.S. dol11 lars, which is a major factor affecting the foreign ex12 change rate value of the United States dollar. There13 fore, the Board of Governors and Federal Open 

14 Market Committee should report to Congress on the 

15 impact of monetary policy on the foreign exchange 

16 rate value of the United States dollar. 

17 (2) Over the last several decades, Secretaries of 

18 the Treasury have repeatedly used the Exchange 

19 Stabilization Fund for purposes that were not envi20 sioned by Congress. To prevent further abuses, the 

21 Exchange Stabilization Fund should be renamed as 

22 the Special Drawing Rights Fund. The Special 

23 Drawing Rights Fund should hold the Special Draw24 ing Rights that the International Monetary Fund 

25 provided to the United States. Any other assets curmstockstill on DSK4VPTVN1PROD with BILLS

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1 rently in the Exchange Stabilization Fund should be 

2 liquidated, and the proceeds used to reduce the pub3 lic debt. 

4 SEC. 502. REPORT ON THE EFFECT OF EXCHANGE RATE 

5 POLICY. 

6 Section 2B(b) of the Federal Reserve Act, as amend7 ed by section 102(b), is further amended by adding at the 

8 end the following: 

9 ‘‘(5) an analysis of how the policies of the 

10 Board and the Federal Open Market Committee are 

11 affecting the foreign exchange rate value of the 

12 United States dollar.’’. 

13 SEC. 503. RENAMING OF EXCHANGE STABILIZATION FUND. 

14 (a) IN GENERAL.—Section 5302 of title 31, United 

15 States Code, is amended by striking ‘‘stabilization fund’’ 

16 each place such term appears and inserting ‘‘Special 

17 Drawing Rights Fund’’. 

18 (b) CONFORMING AMENDMENTS.— 

19 (1) BALANCED BUDGET AND EMERGENCY DEF20 ICIT CONTROL ACT OF 1985.—Section 255(g)(1)(A) 

21 of the Balanced Budget and Emergency Deficit Con22 trol Act of 1985 (2 U.S.C. 905(g)(1)(A)) is amended 

23 by striking ‘‘Exchange Stabilization Fund’’ and in24 serting ‘‘Special Drawing Rights Fund’’. 

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1 (2) EMERGENCY ECONOMIC STABILIZATION ACT

2 OF 2008.—The Emergency Economic Stabilization 

3 Act of 2008 (12 U.S.C. 5211 et seq.) is amended— 

4 (A) in section 131, by striking ‘‘Exchange 

5 Stabilization Fund’’ each place such term ap6 pears in headings and text and inserting ‘‘Spe7 cial Drawing Rights Fund’’; and 

8 (B) in the item relating to section 131 in 

9 the table of contents of such Act, by striking 

10 ‘‘Exchange Stabilization Fund’’ and inserting 

11 ‘‘Special Drawing Rights Fund’’. 

12 (3) INTERNATIONAL FINANCIAL INSTITUTIONS

13 ACT.—Section 1704 of the International Financial 

14 Institutions Act (22 U.S.C. 262r–3) is amended by 

15 striking ‘‘stabilization fund’’ each place such term 

16 appears and inserting ‘‘Special Drawing Rights 

17 Fund’’. 

18 (4) SPECIAL DRAWING RIGHTS ACT.—The Spe19 cial Drawing Rights Act (22 U.S.C. 286n et seq.) is 

20 amended by striking ‘‘Exchange Stabilization Fund’’ 

21 each place such term appears and inserting ‘‘Special 

22 Drawing Rights Fund’’. 

23 (c) REFERENCES.—Any reference in a law, regula24 tion, document, paper, or other record of the United 

25 States to the ‘‘Exchange Stabilization Fund’’ shall be 

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1 deemed a reference to the ‘‘Special Drawing Rights 

2 Fund’’. 

3 SEC. 504. CONVERSION TO ALL-SDR FUND. 

4 (a) FUNDS USED TO REDUCE THE DEBT.—The Sec5 retary of the Treasury shall liquidate all property in the 

6 Special Drawing Rights Fund (as so renamed under sec7 tion 503), other than Special Drawing Rights, and use all 

8 such amounts to reduce the public debt. 

9 (b) LIMITATION ON FUND.—Section 5302 of title 31, 

10 United States Code, is amended— 

11 (1) in subsection (a)(1)— 

12 (A) by striking ‘‘is available to carry out’’ 

13 and inserting ‘‘is only available to carry out’’; 

14 and 

15 (B) by striking ‘‘, and for investing in obli16 gations of the United States Government those 

17 amounts in the fund the Secretary of the Treas18 ury, with the approval of the President, decides 

19 are not required at the time to carry out this 

20 section. Proceeds of sales and investments, 

21 earnings, and interest shall be paid into the 

22 fund and are available to carry out this section. 

23 However, the fund is not available to pay ad24 ministrative expenses’’; and 

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1 (2) by striking subsection (b) and inserting the 

2 following: 

3 ‘‘(b) FUND ONLY TO HOLD SPECIAL DRAWING

4 RIGHTS.—Notwithstanding any other provision of law, 

5 only Special Drawing Rights may be deposited into the 

6 Special Drawing Rights Fund.’’. 

7 (c) CONFORMING AMENDMENTS.— 

8 (1) BRETTON WOODS AGREEMENTS ACT.—Sec9 tion 18 of the Bretton Woods Agreements Act (22 

10 U.S.C. 286e–3) is hereby repealed. 

11 (2) SUPPORT FOR EAST EUROPEAN DEMOCRACY

12 (SEED) ACT OF 1989.—The Support for East Euro13 pean Democracy (SEED) Act of 1989 (22 U.S.C. 

14 5401 et seq.) is amended— 

15 (A) in section 101(b)(1), by striking ‘‘such 

16 as—’’ and all that follows through the end of 

17 the paragraph and inserting ‘‘such as the au18 thority provided in section 102(c) of this Act.’’; 

19 and 

20 (B) in section 102(a), by striking ‘‘section 

21 101(b)—’’ and all that follows through the end 

22 of the subsection and inserting ‘‘section 101(b), 

23 should work closely with the European Commu24 nity and international financial institutions to 

25 determine the extent of emergency assistance 

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1 required by Poland for the fourth quarter of 

2 1989.’’. 

3 (d) TREATMENT OF CERTAIN FUNDS.—Funds that 

4 would otherwise have been deposited into the Special 

5 Drawing Rights Fund (as so renamed under subsection 

6 (a)), but for the amendments made by this section, shall 

7 instead be paid to the Secretary of the Treasury, and the 

8 Secretary of the Treasury shall use such funds to reduce 

9 the public debt. 

10 (e) WIND DOWN PERIOD FOR CERTAIN TRANS11 ACTIONS.—Notwithstanding any other provision of this 

12 section, during the 3-year period beginning on the date 

13 of the enactment of this Act, property other than Special 

14 Drawing Rights may be deposited, and maintained, in the 

15 Special Drawing Rights Fund as needed to fulfill any out16 standing obligations on the Fund. 

17 TITLE VI—CREDIT ALLOCATION 

18 NEUTRALITY ACT 

19 SEC. 601. FINDINGS. 

20 The Congress finds the following: 

21 (1) In conducting open market operations, the 

22 Federal Open Market Committee should not allocate 

23 credit among households, firms, and sectors of the 

24 United States economy. 

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1 (2) To assure the credit allocation neutrality of 

2 open market operations among households, firms, 

3 and sectors of the United States economy, the Fed4 eral Open Market Committee should conduct open 

5 market operations in United States Government se6 curities, and repurchase and reverse repurchase 

7 agreements that have a term of 1 year or less, ex8 cept in unusual and exigent circumstances. 

9 SEC. 602. LIMITATION ON CERTAIN NON-EMERGENCY SECU10 RITY PURCHASES. 

11 (a) IN GENERAL.—The Federal Reserve Act is 

12 amended— 

13 (1) in section 12A, by adding at the end the fol14 lowing: 

15 ‘‘(d) EMERGENCY PURCHASING AUTHORITY.— 

16 ‘‘(1) IN GENERAL.—In unusual and exigent cir17 cumstances, the Committee, by the affirmative vote 

of at least 2 18 ⁄3 of the members of the Committee, may 

19 authorize any Federal reserve bank, during such pe20 riod as the Committee may determine— 

21 ‘‘(A) to buy and sell, at home or abroad, 

22 bills, notes, revenue bonds, and warrants with a 

23 maturity from date of purchase of not exceed24 ing six months, issued in anticipation of the col25 lection of taxes or in anticipation of the receipt 

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1 of assured revenues by any State, county, dis2 trict, political subdivision, or municipality in the 

3 continental United States, including irrigation, 

4 drainage and reclamation districts, and obliga5 tions of, or fully guaranteed as to principal and 

6 interest by, a foreign government or agency 

7 thereof; and 

8 ‘‘(B) to buy and sell in the open market, 

9 under the direction and regulations of the Com10 mittee, any obligation which is a direct obliga11 tion of, or fully guaranteed as to principal and 

12 interest by, any agency of the United States. 

13 ‘‘(2) MAXIMUM HOLDING PERIOD.—Any bond, 

14 bill, note, revenue bond, warrant, or other obligation 

15 purchased by a Federal reserve bank pursuant to 

16 paragraph (1) shall be disposed of before the end of 

17 the 5-year period beginning on the end of the period 

18 determined by the Committee under paragraph (1). 

19 ‘‘(3) REPORT.—The Committee shall provide to 

20 the Committee on Banking, Housing, and Urban Af21 fairs of the Senate and the Committee on Financial 

22 Services of the House of Representatives, not later 

23 than 7 days after the Committee makes an author24 ization under this subsection, a report that in25 cludes— 

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1 ‘‘(A) the justification for the exercise of 

2 authority to provide; 

3 ‘‘(B) the identity of the person to or from 

4 which purchases or sales were made; 

5 ‘‘(C) the date and amount of the purchases 

6 or sales; and 

7 ‘‘(D) the material terms of the purchases 

8 or sales.’’; and 

9 (2) in section 14(b)— 

10 (A) in paragraph (1), by striking ‘‘bonds 

11 issued under the provisions of subsection (c) of 

12 section 4 of the Home Owners’ Loan Act of 

13 1933, as amended, and having maturities from 

14 date of purchase of not exceeding six months, 

15 and bills, notes, revenue bonds, and warrants 

16 with a maturity from date of purchase of not 

17 exceeding six months, issued in anticipation of 

18 the collection of taxes or in anticipation of the 

19 receipt of assured revenues by any State, coun20 ty, district, political subdivision, or municipality 

21 in the continental United States, including irri22 gation, drainage and reclamation districts, and 

23 obligations of, or fully guaranteed as to prin24 cipal and interest by, a foreign government or 

25 agency thereof,’’; and 

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1 (B) by amending paragraph (2) to read as 

2 follows: 

3 ‘‘(2) To enter into security repurchase agreements 

4 and reverse repurchase agreements that have a term of 

5 1 year or less, in accordance with rules and regulations 

6 prescribed by the Board of Governors of the Federal Re7 serve System.’’. 

8 (b) TRANSITION PROVISION.—Each Federal reserve 

9 bank that holds bonds, bills, notes, revenue bonds, war10 rants, or other obligations purchased under the authority 

11 granted by a provision struck under subsection (a)(2) shall 

12 dispose of such obligations not later than the end of the 

13 5-year period beginning on the date of the enactment of 

14 this Act. 

15 TITLE VII—BUREAU OF CON16 SUMER FINANCIAL PROTEC17 TION FUNDING ACT 

18 SEC. 701. FINDINGS. 

19 The Congress finds the following: 

20 (1) As our Nation’s central bank, the Federal 

21 Reserve conducts United States monetary policy and 

22 necessarily exercises broad oversight responsibility to 

23 ensure the safety, soundness, and smooth func24 tioning of the Nation’s banking and payments sys25 tems. 

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1 (2) There exists a broad consensus among pol2 icymakers, academics, and most informed com3 mentators that central bank independence is nec4 essary to the proper and effective conduct of mone5 tary policy and those regulatory activities necessary 

6 for the implementation of such monetary policy. 

7 (3) In order to preserve the independence of its 

8 activities, the Federal Reserve should remain oper9 ationally and financially autonomous within the 

10 United States Government. 

11 (4) However, those activities that do not relate 

12 to the functions listed in paragraph (1) should not 

13 occur outside of the constitutionally granted author14 ity of Congress to authorize and oversee the expendi15 ture of public funds. 

16 (5) Therefore, the Bureau of Consumer Finan17 cial Protection should be subject to the Federal ap18 propriations process to ensure effective Congres19 sional oversight over its activities and use of public 

20 funds. 

21 SEC. 702. BUREAU OF CONSUMER FINANCIAL PROTECTION 

22 FUNDING. 

23 (a) IN GENERAL.—Section 1017 of the Consumer Fi24 nancial Protection Act of 2010 is amended— 

25 (1) in subsection (a)— 

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1 (A) by amending the heading of such sub2 section to read as follows: ‘‘BUDGET, FINAN3 CIAL MANAGEMENT, AND AUDIT.—’’; 

4 (B) by striking paragraphs (1), (2), and 

5 (3); 

6 (C) by redesignating paragraphs (4) and 

7 (5) as paragraphs (1) and (2), respectively; and 

8 (D) in paragraph (1), as so redesignated— 

9 (i) by striking subparagraph (E); and 

10 (ii) by redesignating subparagraph 

11 (F) as subparagraph (E); 

12 (2) by striking subsections (b) and (c); 

13 (3) by redesignating subsections (d) and (e) as 

14 subsections (b) and (c), respectively; and 

15 (4) in subsection (c), as so redesignated— 

16 (A) by striking paragraphs (1), (2), and 

17 (3) and inserting the following: 

18 ‘‘(1) AUTHORIZATION OF APPROPRIATIONS.— 

19 There is authorized to be appropriated such funds as 

20 may be necessary to carry out this title.’’; and 

21 (B) by redesignating paragraph (4) as 

22 paragraph (2). 

23 (b) EFFECTIVE DATE.—The amendments made by 

24 this section shall take effect on October 1, 2013. 

Æ 

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