I
104TH CONGRESS
1ST SESSION
H. R. 1498
To modernize the Federal Reserve System, to provide for a Federal Open
Market Advisory Committee, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
APRIL 7, 1995
Mr. HAMILTON introduced the following bill; which was referred to the
Committee on Banking and Financial Services
A BILL
To modernize the Federal Reserve System, to provide for
a Federal Open Market Advisory Committee, and for
other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Federal Reserve Re-
form 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 Fed-
eral 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 Fed-
eral 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 op-
erations.’’.
(b) CONFORMING AMENDMENTS.—
(1) FEDERAL RESERVE ACT.—The Federal Re-
serve 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 
‘‘REGULA-
TIONS.—’’ before ‘‘No Federal Re-
serve’’; 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 Inter-
national Lending Supervision Act of 1983 (12
U.S.C. 3910(a)(3)(C)) is amended by striking ‘‘Fed-
eral Open Market Committee’’ and inserting ‘‘Board
of Governors of the Federal Reserve System’’.
SEC. 3. CONSULTATION BETWEEN THE BOARD OF GOV-
ERNORS 
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 sub-
section:
‘‘(b) CONSULTATION REQUIRED.—The Board of Gov-
ernors 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 pre-
ceding the date on which each report required under
the second sentence of subsection (a) is submit-
ted 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 sec-
tion 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 cal-
endar 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 sen-
tence, 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 Chair-
man 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 undes-
ignated 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 unavail-
ability 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 of-
fice 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 para-
graph (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: ‘‘Notwith-
standing any other provision of law, each change, of any
nature whatsoever, in the intermediate targets for mone-
tary 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 re-
garding monetary aggregates, credit aggregates, prices,
interest rates, or bank reserves.’’.
SEC. 6. AUDIT OF FINANCIAL TRANSACTIONS BY COMP-
TROLLER 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 com-
munications between or among members of the
Board of Governors of the Federal Reserve System
or officers or employees of the Federal Reserve Sys-
tem relating to any transaction described in para-
graph (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 sub-
section:
‘‘(h) FEDERAL RESERVE BOARD BUDGET TREAT-
MENT.—Not later than October 16 of each year, the esti-
mated receipts and proposed expenditures of the Board
of Governors of the Federal Reserve System and all Fed-
eral 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 sub-
section, without change, together with the budget trans-
mitted to the Congress under subsection (a).’’.
Æ