IB 
Union Calendar No. 883 
115TH CONGRESS 
2D SESSION 
H. R. 6741 
[Report No. 115–1116, Part I] 
To amend the Federal Reserve Act to increase monetary policy transparency 
and accountability and to make reforms to the Federal Reserve System, 
and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
SEPTEMBER 7, 2018 
Mr. BARR (for himself, Mr. LUCAS, Mr. MOONEY of West Virginia, Ms. 
TENNEY, and Mr. DAVIDSON) introduced the following bill; which was re-
ferred to the Committee on Financial Services, and in addition to the 
Committee on Rules, for a period to be subsequently determined by the 
Speaker, in each case for consideration of such provisions as fall within 
the jurisdiction of the committee concerned 
JANUARY 2, 2019 
Reported from the Committee on Financial Services with an amendment 
[Strike out all after the enacting clause and insert the part printed in italic] 
JANUARY 2, 2019 
Committee on Rules discharged; committed to the Committee of the Whole 
House on the State of the Union and ordered to be printed 
[For text of introduced bill, see copy of bill as introduced on September 7, 2018] 
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A BILL 
To amend the Federal Reserve Act to increase monetary 
policy transparency and accountability and to make re-
forms to the Federal Reserve System, and for other 
purposes. 
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Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Federal Reserve Reform Act of 2018’’. 
(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows: 
Sec. 1. Short title; table of contents. 
Sec. 2. Monetary policy transparency and accountability. 
Sec. 3. Independence from credit policy. 
Sec. 4. Congressional accountability for emergency lending programs. 
Sec. 5. Interest rates on balances maintained at a Federal Reserve Bank by de-
pository institutions established by Federal Open Market Com-
mittee. 
Sec. 6. Membership of Federal Open Market Committee. 
Sec. 7. Bringing the non-monetary policy related functions of the Board of Gov-
ernors of the Federal Reserve System into the appropriations 
process. 
Sec. 8. Amendment to appointment of presidents of Federal Reserve Banks. 
Sec. 9. Federal Open Market Committee blackout period. 
Sec. 10. Salaries, financial disclosures, and office staff of the Board of Governors 
of the Federal Reserve System. 
Sec. 11. Vice Chairman for Supervision report requirement. 
SEC. 2. MONETARY POLICY TRANSPARENCY AND ACCOUNT-
ABILITY. 
Section 12A of the Federal Reserve Act (12 U.S.C. 263) 
is amended— 
(1) by redesignating subsections (b) and (c) as 
subsections (d) and (e), respectively; and 
(2) by inserting after subsection (a) the following 
new subsections: 
‘‘(b) POLICY TRANSPARENCY.— 
‘‘(1) MONETARY POLICY STRATEGY.— 
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‘‘(A) IN
GENERAL.—The Committee shall 
annually establish exactly 1 monetary policy 
strategy, which shall serve as a non-technical 
public communication of the Committee’s con-
sensus expectation for the conduct of monetary 
policy during that calendar year. 
‘‘(B) REQUIREMENTS.—Each monetary pol-
icy strategy of the Committee shall include the 
following: 
‘‘(i) A plain English description of 
how the Committee would adjust each of the 
following monetary policy instruments in 
reaction to changes in a small and well-de-
fined set of publicly available economic in-
dicators: 
‘‘(I) Short-term interest rate tar-
gets established by the Committee. 
‘‘(II) Open-market operations au-
thorized under section 14. 
‘‘(III) 
Earnings 
on 
balances 
maintained at a Federal reserve bank 
by or on behalf of a depository institu-
tion under section 19(b)(12). 
‘‘(ii) An identification of 1 monetary 
policy instrument from the list in clause (i) 
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that the Committee expects to use as the 
primary instrument for implementing the 
monetary policy strategy described under 
subparagraph (A). 
‘‘(2) REFERENCE MONETARY POLICY RULES.—In 
addition to the monetary policy strategy required 
under paragraph (1), the Committee shall annually 
adopt at least 1 and not more than 3 reference mone-
tary policy rules, each of which shall mathematically 
express how the primary monetary policy instrument 
identified under paragraph (1)(B)(ii) reacts to 
changes in a small and well-defined set of publicly 
available economic indicators. 
‘‘(3) DEVIATIONS.—Nothing in this subsection 
shall be construed to prevent the Committee from set-
ting short-term interest rate targets, conducting open- 
market operations, or paying earnings on balances 
pursuant to section 19(b)(12) in a manner that devi-
ates from a monetary policy strategy or any reference 
monetary policy rules established under this sub-
section. 
‘‘(c) TESTIMONY AND REPORTS OF THE CHAIRMAN.— 
The Chairman shall, concurrent with each semi-annual 
hearing required under section 2B, submit a report to the 
Committee on Banking, Housing, and Urban Affairs of the 
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Senate and the Committee on Banking and Financial Serv-
ices of the House of Representatives, containing— 
‘‘(1) a statement as to whether the monetary pol-
icy strategy established under subsection (b)(1) quali-
tatively differs from any of the reference monetary 
policy rules required under subsection (b)(2) and, if 
applicable, a full and non-technical explanation of 
any such difference; 
‘‘(2) a statement as to whether the Committee’s 
conduct of monetary policy since the previous report 
quantitatively differs from any reference monetary 
policy rule and, if applicable, a full and non-tech-
nical explanation of any such differences; and 
‘‘(3) a description of— 
‘‘(A) the circumstances under which the 
Committee’s monetary policy strategy may be 
amended from year to year; and 
‘‘(B) a full and non-technical explanation of 
any such actual amendment.’’. 
SEC. 3. INDEPENDENCE FROM CREDIT POLICY. 
(a) RETURNING TO A MONETARY POLICY BALANCE 
SHEET.— 
(1) IN GENERAL.—Not later than 1 year after 
the date of the enactment of this Act— 
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(A) the Board of Governors of the Federal 
Reserve System shall transfer to the Department 
of the Treasury all covered assets that are neither 
gold stock, Treasury currency, nor direct obliga-
tions of the United States, foreign central banks, 
or the International Monetary Fund; and 
(B) the Secretary of the Treasury shall 
transfer to the Federal reserve banks direct obli-
gations of the United States of equivalent market 
value to such covered assets. 
(2) COVERED
ASSETS
DEFINED.—In this sub-
section, the term ‘‘covered assets’’ means all assets— 
(A) purchased through open-market oper-
ations by the Federal reserve banks; or 
(B) acquired through transactions under the 
following sections of the Federal Reserve Act (12 
U.S.C. 221 et seq.): 
(i) Section 10A before the date of the 
enactment of this Act. 
(ii) Section 10B. 
(iii) Section 13. 
(iv) Section 13A. 
(v) Section 24. 
(b) OPEN MARKET ASSET PURCHASES.—Section 14(b) 
(12 U.S.C. 355) of the Federal Reserve Act (relating to 
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‘‘Purchase and sale of obligations of United States, States, 
counties, etc.’’) is amended to read as follows: 
‘‘(b) To buy and sell in the open market, at home or 
abroad, under the direction and regulations of the Federal 
Open Market Committee, gold stock, Treasury currency, or 
direct obligations of the United States, foreign central 
banks, or the International Monetary Fund. Nothing in this 
subsection shall be construed to limit advances under sec-
tion 10B, or discount loans under sections 13, 13A, or 24.’’. 
(c) MAINTAINING
A MONETARY POLICY BALANCE 
SHEET.— 
(1) ASSETS
ACQUIRED
UNDER
EMERGENCY 
LENDING.—Section 13(3) of the Federal Reserve Act 
(12 U.S.C. 343(3)) is amended by adding at the end 
the following new subparagraph: 
‘‘(F) Not later than 1 year after a Federal 
reserve bank acquires any assets under this para-
graph that are neither gold nor direct obligations 
of the United States, foreign central banks, or the 
International Monetary Fund— 
‘‘(i) the Board shall transfer such as-
sets of the Federal reserve bank to the De-
partment of the Treasury; and 
‘‘(ii) the Secretary of the Treasury 
shall transfer to the Federal reserve banks 
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direct obligations of the United States of 
equivalent market value to the assets de-
scribed in clause (i).’’. 
(2) REPEAL OF AUTHORITY TO PROVIDE EMER-
GENCY ADVANCES TO GROUPS OF MEMBER BANKS.— 
Section 10A of the Federal Reserve Act is repealed. 
(3) ASSETS ACQUIRED THROUGH ADVANCES TO 
MEMBER
BANKS.—The second undesignated para-
graph of subsection (a) of section 10B of the Federal 
Reserve Act is amended— 
(A) by inserting ‘‘not’’ before ‘‘secured by 
mortgage loans’’; and 
(B) by striking ‘‘lowest discount rate’’ and 
inserting ‘‘highest discount rate’’. 
SEC. 4. CONGRESSIONAL ACCOUNTABILITY FOR EMER-
GENCY LENDING PROGRAMS. 
Section 13(3) of the Federal Reserve Act (12 U.S.C. 
343(3)), as amended by section 3, is further amended— 
(1) in subparagraph (A)— 
(A) by inserting ‘‘that pose a threat to the 
financial stability of the United States’’ after 
‘‘unusual and exigent circumstances’’; and 
(B) by striking ‘‘the affirmative vote of not 
less than five members’’ and inserting ‘‘the prior 
approval of the Secretary of the Treasury and 
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not less than 2⁄3 of the members of the Federal 
Open Market Committee’’; 
(2) in subparagraph (B)— 
(A) by moving such subparagraph 4 ems to 
the left; 
(B) in clause (i), by inserting at the end the 
following: ‘‘Federal reserve banks may not accept 
equity securities issued by the recipient of any 
loan or other financial assistance under this 
paragraph as collateral. Not later than 6 months 
after the date of the enactment of this sentence, 
the Board shall, by rule, establish— 
‘‘(I) a method for determining the sufficiency of 
the collateral required under this paragraph; 
‘‘(II) acceptable classes of collateral; 
‘‘(III) the amount of any discount on the value 
of the collateral that the Federal reserve banks will 
apply for purposes of calculating the sufficiency of 
collateral under this paragraph; and 
‘‘(IV) a method for obtaining independent ap-
praisals of the value of collateral the Federal reserve 
banks receive.’’; 
(C) in clause (ii)— 
(i) by striking the second sentence; and 
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(ii) by inserting after the first sentence 
the following: ‘‘A borrower shall not be eligi-
ble to borrow from any emergency lending 
program or facility unless the Board and 
all Federal banking regulators with juris-
diction over the borrower certify that, at the 
time the borrower initially borrows under 
the program or facility, the borrower is not 
insolvent.’’; and 
(D) by striking clause (iv); 
(3) by inserting ‘‘financial institution’’ before 
‘‘participant’’ each place such term appears; 
(4) in subparagraph (D)(i), by inserting ‘‘finan-
cial institution’’ before ‘‘participants’’; and 
(5) by adding at the end the following new sub-
paragraphs: 
‘‘(G) JOINT RESOLUTION OF APPROVAL.— 
‘‘(i) IN GENERAL.—A program or facil-
ity created under subparagraph (A) shall 
terminate on the date that is 30 calendar 
days after the date on which Congress re-
ceives a report described in subparagraph 
(C) unless there is enacted into law a joint 
resolution approving the program or facil-
ity not later than 30 calendar days after 
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the date on which the report is received. 
Any loan offered through the program or fa-
cility that is outstanding as of the date on 
which the program or facility is terminated 
shall be repaid in full not later than 30 cal-
endar days after the date on which the pro-
gram or facility is terminated. 
‘‘(ii) CONTENTS
OF
JOINT
RESOLU-
TION.—For the purpose of this subpara-
graph, the term ‘joint resolution’ means 
only a joint resolution— 
‘‘(I) that is introduced not later 
than 3 calendar days after the date on 
which the report described in subpara-
graph (C) is received by Congress; 
‘‘(II) that does not have a pre-
amble; 
‘‘(III) the title of which is as fol-
lows: ‘Joint resolution relating to the 
approval of a program or facility cre-
ated by the Board of Governors of the 
Federal Reserve System’; and 
‘‘(IV) the matter after the resolv-
ing clause of which is as follows: ‘That 
Congress approves the program or fa-
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cility created by the Board of Gov-
ernors of the Federal Reserve System 
on 
llllllllll.’ 
(The 
blank space being appropriately filled 
in). 
‘‘(iii) FAST TRACK CONSIDERATION IN 
HOUSE OF REPRESENTATIVES.— 
‘‘(I) 
RECONVENING.—Upon 
re-
ceipt of a report under subparagraph 
(C), the Speaker, if the House would 
otherwise be adjourned, shall notify the 
Members of the House that, pursuant 
to this subparagraph, the House shall 
convene not later than the second cal-
endar day after receipt of such report. 
‘‘(II) 
REPORTING
AND
DIS-
CHARGE.—Any committee of the House 
of Representatives to which a joint res-
olution is referred shall report it to the 
House not later than 5 calendar days 
after the date of receipt of the report 
described in subparagraph (C). If a 
committee fails to report the joint reso-
lution within that period, the com-
mittee shall be discharged from further 
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consideration of the joint resolution 
and the joint resolution shall be re-
ferred to the appropriate calendar. 
‘‘(III) PROCEEDING TO CONSIDER-
ATION.—After each committee author-
ized to consider a joint resolution re-
ports it to the House or has been dis-
charged from its consideration, it shall 
be in order, not later than the sixth 
day after Congress receives the report 
described in subparagraph (C), to move 
to proceed to consider the joint resolu-
tion in the House. All points of order 
against the motion are waived. Such a 
motion shall not be in order after the 
House has disposed of a motion to pro-
ceed on the joint resolution. The pre-
vious question shall be considered as 
ordered on the motion to its adoption 
without intervening motion. The mo-
tion shall not be debatable. A motion to 
reconsider the vote by which the motion 
is disposed of shall not be in order. 
‘‘(IV) CONSIDERATION.—The joint 
resolution shall be considered as read. 
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