SEC. 2. REQUIREMENTS FOR POLICY RULES OF THE FED-
ERAL OPEN MARKET COMMITTEE. 
(a) IN GENERAL.—The Federal Reserve Act (12 
U.S.C. 221 et seq.) is amended by inserting after section 
2B the following new section: 
‘‘SEC. 2C. DIRECTIVE POLICY RULES OF THE FEDERAL 
OPEN MARKET COMMITTEE. 
‘‘(a) DEFINITIONS.—In this section the following 
definitions shall apply: 
‘‘(1) APPROPRIATE
CONGRESSIONAL
COMMIT-
TEES.—The term ‘appropriate congressional com-
mittees’ means the Committee on Financial Services 
of the House of Representatives and the Committee 
on Banking, Housing, and Urban Affairs of the Sen-
ate. 
‘‘(2) DIRECTIVE POLICY RULE.—The term ‘Di-
rective Policy Rule’ means a policy rule developed by 
the Federal Open Market Committee that meets the 
requirements of subsection (c) and that provides the 
basis for the Open Market Operations Directive. 
‘‘(3) GDP.—The term ‘GDP’ means the gross 
domestic product of the United States as computed 
and published by the Department of Commerce. 
‘‘(4) INTERMEDIATE POLICY INPUT.—The term 
‘Intermediate Policy Input’— 
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‘‘(A) may include any variable determined 
by the Federal Open Market Committee as a 
necessary input to guide open-market oper-
ations; 
‘‘(B) shall include an estimate of, and the 
method of calculation for, the current rate of 
inflation or current inflation expectations; and 
‘‘(C) shall include, specifying whether the 
variable or estimate is historical, current, or a 
forecast and the method of calculation, at least 
one of— 
‘‘(i) an estimate of real GDP, nominal 
GDP, or potential GDP; 
‘‘(ii) an estimate of the monetary ag-
gregate compiled by the Board of Gov-
ernors of the Federal Reserve System and 
Federal reserve banks; or 
‘‘(iii) an interactive variable or a net 
estimate composed of the estimates de-
scribed in clauses (i) and (ii). 
‘‘(5) LEGISLATIVE DAY.—The term ‘legislative 
day’ means a day on which either House of Congress 
is in session. 
‘‘(6) OPEN MARKET OPERATIONS DIRECTIVE.— 
The term ‘Open Market Operations Directive’ means 
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an order to achieve a specified Policy Instrument 
Target provided to the Federal Reserve Bank of 
New York by the Federal Open Market Committee 
pursuant to powers authorized under section 14 of 
this Act that guide open-market operations. 
‘‘(7) POLICY INSTRUMENT.—The term ‘Policy 
Instrument’ means— 
‘‘(A) the nominal Federal funds rate; 
‘‘(B) the nominal rate of interest paid on 
nonborrowed reserves; or 
‘‘(C) the discount window primary credit 
interest rate most recently published on the 
Federal Reserve Statistical Release on selected 
interest rates (daily or weekly), commonly re-
ferred to as the H.15 release. 
‘‘(8) POLICY INSTRUMENT TARGET.—The term 
‘Policy Instrument Target’ means the target for the 
Policy Instrument specified in the Open Market Op-
erations Directive. 
‘‘(9) REFERENCE
POLICY
RULE.—The term 
‘Reference Policy Rule’ means a calculation of the 
nominal Federal funds rate as equal to the sum of 
the following: 
‘‘(A) The rate of inflation over the pre-
vious four quarters. 
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‘‘(B) One-half of the percentage deviation 
of the real GDP from an estimate of potential 
GDP. 
‘‘(C) One-half of the difference between the 
rate of inflation over the previous four quarters 
and two. 
‘‘(D) Two. 
‘‘(b) SUBMITTING A DIRECTIVE POLICY RULE.—Not 
later than 48 hours after the end of a meeting of the Fed-
eral Open Market Committee, the Chairman of the Fed-
eral Open Market Committee shall submit to the appro-
priate congressional committees and the Comptroller Gen-
eral of the United States a Directive Policy Rule and a 
statement that identifies the members of the Federal Open 
Market Committee who voted in favor of the Rule. 
‘‘(c) REQUIREMENTS
FOR
A DIRECTIVE POLICY 
RULE.—A Directive Policy Rule shall— 
‘‘(1) identify the Policy Instrument the Direc-
tive Policy Rule is designed to target; 
‘‘(2) describe the strategy or rule of the Federal 
Open Market Committee for the systematic quan-
titative adjustment of the Policy Instrument Target 
to respond to a change in the Intermediate Policy 
Inputs; 
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‘‘(3) include a function that comprehensively 
models the interactive relationship between the In-
termediate Policy Inputs; 
‘‘(4) include the coefficients of the Directive 
Policy Rule that generate the current Policy Instru-
ment Target and a range of predicted future values 
for the Policy Instrument Target if changes occur in 
any Intermediate Policy Input; 
‘‘(5) describe the procedure for adjusting the 
supply of bank reserves to achieve the Policy Instru-
ment Target; 
‘‘(6) include a statement as to whether the Di-
rective Policy Rule substantially conforms to the 
Reference Policy Rule and, if applicable— 
‘‘(A) an explanation of the extent to which 
it departs from the Reference Policy Rule; 
‘‘(B) a detailed justification for that depar-
ture; and 
‘‘(C) a description of the circumstances 
under which the Directive Policy Rule may be 
amended in the future; 
‘‘(7) include a certification that such Rule is ex-
pected to support the economy in achieving stable 
prices and maximum natural employment over the 
long term; and 
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‘‘(8) include a calculation that describes with 
mathematical precision the expected annual inflation 
rate over a 5-year period. 
‘‘(d) GAO REPORT.—The Comptroller General of the 
United States shall compare the Directive Policy Rule sub-
mitted under subsection (b) with the rule that was most 
recently submitted to determine whether the Directive Pol-
icy Rule has materially changed. If the Directive Policy 
Rule has materially changed, the Comptroller General 
shall, not later than 7 days after each meeting of the Fed-
eral Open Market Committee, conduct an audit of the 
Rule and submit a report to the appropriate congressional 
committees specifying whether the Rule submitted after 
that meeting and the Federal Open Market Committee are 
in compliance with this section. 
‘‘(e) CHANGING MARKET CONDITIONS.— 
‘‘(1) RULE
OF
CONSTRUCTION.—Nothing in 
this Act shall be construed to require that the plans 
with respect to the systematic quantitative adjust-
ment of the Policy Instrument Target described 
under subsection (c)(2) be implemented if the Fed-
eral Open Market Committee determines that such 
plans cannot or should not be achieved due to 
changing market conditions. 
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‘‘(2) GAO APPROVAL OF UPDATE.—Upon deter-
mining that plans described in paragraph (1) cannot 
or should not be achieved, the Federal Open Market 
Committee shall submit an explanation for that de-
termination and an updated version of the Directive 
Policy Rule to the Comptroller General of the 
United States and the appropriate congressional 
committees not later than 48 hours after making the 
determination. The Comptroller General shall, not 
later than 48 hours after receiving such updated 
version, conduct an audit and issue a report deter-
mining whether such updated version and the Fed-
eral Open Market Committee are in compliance with 
this section. 
‘‘(f) DIRECTIVE POLICY RULE AND FEDERAL OPEN 
MARKET COMMITTEE NOT IN COMPLIANCE.— 
‘‘(1) IN GENERAL.—If the Comptroller General 
of the United States determines that the Directive 
Policy Rule and the Federal Open Market Com-
mittee are not in compliance with this section in the 
report submitted pursuant to subsection (d), or that 
the updated version of the Directive Policy Rule and 
the Federal Open Market Committee are not in com-
pliance with this section in the report submitted pur-
suant to subsection (e)(2), the Chairman of the 
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Board of Governors of the Federal Reserve System 
shall, not later than 7 legislative days after the date 
of submission of such a report, testify before the ap-
propriate congressional committees as to why the 
Directive Policy Rule, the updated version, or the 
Federal Open Market Committee is not in compli-
ance. 
‘‘(2) GAO AUDIT.—Notwithstanding subsection 
(b) of section 714 of title 31, United States Code, 
upon submitting a report of noncompliance pursuant 
to subsection (d) or subsection (e)(2) and after the 
period of 7 legislative days described in paragraph 
(1), the Comptroller General shall audit the conduct 
of monetary policy by the Board of Governors of the 
Federal Reserve System and the Federal Open Mar-
ket Committee upon request of the appropriate con-
gressional committee. Such committee may specify 
the parameters of such audit. 
‘‘(g) CONGRESSIONAL HEARINGS.—The Chairman of 
the Board of Governors of the Federal Reserve System 
shall, if requested by either of the appropriate congres-
sional committees and not later than 7 legislative days 
after such request, appear before such committee to ex-
plain any change to the Directive Policy Rule.’’. 
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(b) CONFORMING AMENDMENT.—The second sen-
tence of subsection (b) of section 714 of title 31, United 
States Code, is amended by striking ‘‘Audits’’ and insert-
ing ‘‘Except as provided in section 2C(f) of the Federal 
Reserve Act, audits’’. 
SEC. 3. FEDERAL OPEN MARKET COMMITTEE BLACKOUT 
PERIOD. 
Section 12A of the Federal Reserve Act (12 U.S.C. 
263) is amended by adding at the end the following new 
subsection: 
‘‘(d) BLACKOUT PERIOD.— 
‘‘(1) IN GENERAL.—During a blackout period, 
the only public communications that may be made 
by members and staff of the Committee with respect 
to macroeconomic or financial developments or about 
current or prospective monetary policy issues are the 
following: 
‘‘(A) The dissemination of published data, 
surveys, and reports that have been cleared for 
publication by the Board of Governors of the 
Federal Reserve System. 
‘‘(B) Answers to technical questions spe-
cific to a data release. 
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‘‘(C) Communications with respect to the 
prudential or supervisory functions of the 
Board of Governors. 
‘‘(2) BLACKOUT PERIOD DEFINED.—For pur-
poses of this subsection, and with respect to a meet-
ing of the Committee described under subsection (a), 
the term ‘blackout period’ means the time period 
that— 
‘‘(A) begins immediately after midnight on 
the day that is one week prior to the date on 
which such meeting takes place; and 
‘‘(B) ends at midnight on the day after the 
date on which such meeting takes place.’’. 
SEC. 4. REQUIREMENTS FOR STRESS TESTS AND SUPER-
VISORY LETTERS FOR THE BOARD OF GOV-
ERNORS OF THE FEDERAL RESERVE SYSTEM. 
(a) STRESS TEST RULEMAKING, GAO REVIEW, AND 
PUBLICATION OF RESULTS.—Section 165(i)(1)(B) of the 
Dodd-Frank Wall Street Reform and Consumer Protec-
tion Act (12 U.S.C. 5365(i)(1)(B)) is amended— 
(1) by amending clause (i) to read as follows: 
‘‘(i) shall— 
‘‘(I) issue regulations, after pro-
viding for public notice and comment, 
that provide for at least 3 different 
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sets of conditions under which the 
evaluation required by this subsection 
shall be conducted, including baseline, 
adverse, and severely adverse, and 
methodologies, including models used 
to estimate losses on certain assets; 
and 
‘‘(II) provide copies of such regu-
lations to the Comptroller General of 
the United States and the Panel of 
Economic Advisors of the Congres-
sional Budget Office before publishing 
such regulations;’’; and 
(2) in clause (v), by inserting before the period 
the following: ‘‘, including any results of a resub-
mitted test’’. 
(b) PUBLICATION OF THE NUMBER OF SUPERVISORY 
LETTERS SENT TO THE LARGEST BANK HOLDING COM-
PANIES.—Section 165 of the Dodd-Frank Wall Street Re-
form and Consumer Protection Act (12 U.S.C. 5365) is 
further amended by adding at the end the following new 
subsection: 
‘‘(l) PUBLICATION OF SUPERVISORY LETTER INFOR-
MATION.—The Board of Governors shall publicly dis-
close— 
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‘‘(1) the aggregate number of supervisory let-
ters sent to bank holding companies described in 
subsection (a) since the date of the enactment of 
this section, and keep such number updated; and 
‘‘(2) the aggregate number of such letters that 
are designated as ‘Matters Requiring Attention’ and 
the aggregate number of such letters that are des-
ignated as ‘Matters Requiring Immediate Atten-
tion’.’’. 
SEC. 5. FREQUENCY OF TESTIMONY OF THE CHAIRMAN OF 
THE BOARD OF GOVERNORS OF THE FED-
ERAL RESERVE SYSTEM TO CONGRESS. 
(a) IN GENERAL.—Section 2B of the Federal Reserve 
Act (12 U.S.C. 225b) is amended— 
(1) by striking ‘‘semi-annual’’ each place it ap-
pears and inserting ‘‘quarterly’’; and 
(2) in subsection (a)(2)— 
(A) by inserting ‘‘and October 20’’ after 
‘‘July 20’’ each place it appears; and 
(B) by inserting ‘‘and May 20’’ after 
‘‘February 20’’ each place it appears. 
(b) CONFORMING AMENDMENT.—Paragraph (12) of 
section 10 of the Federal Reserve Act (12 U.S.C. 
247b(12)) is amended by striking ‘‘semi-annual’’ and in-
serting ‘‘quarterly’’. 
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