I 
115TH CONGRESS 
2D SESSION 
H. R. 6741 
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 
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. 
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’’. 
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(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 Gov-
ernors of the Federal Reserve System. 
Sec. 11. Vice Chairman for Supervision report requirement. 
Sec. 12. Removal of dual mandate. 
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 fol-
lowing new subsections: 
‘‘(b) POLICY TRANSPARENCY.— 
‘‘(1) MONETARY POLICY STRATEGY.— 
‘‘(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-
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sensus expectation for the conduct of monetary 
policy during that calendar year. 
‘‘(B) 
REQUIREMENTS.—Each 
monetary 
policy 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- 
defined set of publicly available economic 
indicators: 
‘‘(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) 
that the Committee expects to use as the 
primary instrument for implementing the 
monetary policy strategy described under 
subparagraph (A). 
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‘‘(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 mon-
etary policy rules, each of which shall mathemati-
cally express how the primary monetary policy in-
strument identified under paragraph (1)(B)(ii) re-
acts 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 
setting short-term interest rate targets, conducting 
open-market operations, or paying earnings on bal-
ances pursuant to section 19(b)(12) in a manner 
that deviates from a monetary policy strategy or any 
reference monetary policy rules established under 
this subsection. 
‘‘(c) TESTIMONY
AND REPORTS
OF
THE CHAIR-
MAN.—The Chairman shall, concurrent with each semi-an-
nual hearing required under section 2B, submit a report 
to the Committee on Banking, Housing, and Urban Af-
fairs of the Senate and the Committee on Financial Serv-
ices of the House of Representatives, containing— 
‘‘(1) a statement as to whether the monetary 
policy strategy established under subsection (b)(1) 
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qualitatively differs from any of the reference mone-
tary policy rules required under subsection (b)(2) 
and, if applicable, a full and non-technical expla-
nation 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— 
(A) the Board of Governors of the Federal 
Reserve System shall transfer to the Depart-
ment of the Treasury all covered assets that are 
neither gold stock, Treasury currency, nor di-
rect obligations of the United States, foreign 
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central banks, or the International Monetary 
Fund; and 
(B) the Secretary of the Treasury shall 
transfer to the Federal reserve banks direct ob-
ligations 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 as-
sets— 
(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 (relat-
ing to ‘‘Purchase and sale of obligations of United States, 
States, counties, etc.’’) is amended to read as follows: 
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‘‘(b) To buy and sell in the open market, at home 
or abroad, under the direction and regulations of the Fed-
eral Open Market Committee, gold stock, Treasury cur-
rency, or direct obligations of the United States, foreign 
central banks, or the International Monetary Fund. Noth-
ing in this subsection shall be construed to limit advances 
under section 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 
paragraph that are neither gold nor direct obli-
gations 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 
direct obligations of the United States of 
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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 Fed-
eral 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 
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and not less than 2⁄3 of the members of the 
Federal Open Market Committee’’; 
(2) in subparagraph (B)— 
(A) 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 re-
quired under this paragraph; 
‘‘(II) acceptable classes of collat-
eral; 
‘‘(III) the amount of any dis-
count 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 appraisals of the value of 
collateral the Federal reserve banks 
receive.’’; 
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(B) in clause (ii)— 
(i) by striking the second sentence; 
and 
(ii) by inserting after the first sen-
tence the following: ‘‘A borrower shall not 
be eligible to borrow from any emergency 
lending program or facility unless the 
Board and all Federal banking regulators 
with jurisdiction over the borrower certify 
that, at the time the borrower initially bor-
rows under the program or facility, the 
borrower is not insolvent.’’; and 
(C) 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 fa-
cility 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 
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(C) unless there is enacted into law a joint 
resolution approving the program or facil-
ity not later than 30 calendar days after 
the date on which the report is received. 
Any loan offered through the program or 
facility that is outstanding as of the date 
on which the program or facility is termi-
nated shall be repaid in full not later than 
30 calendar days after the date on which 
the program 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 
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‘‘(IV) the matter after the resolv-
ing clause of which is as follows: 
‘That Congress approves the program 
or facility created by the Board of 
Governors of the Federal Reserve Sys-
tem 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, pur-
suant to this subparagraph, the 
House shall convene not later than 
the second calendar day after receipt 
of such report. 
‘‘(II) 
REPORTING
AND
DIS-
CHARGE.—Any 
committee 
of 
the 
House of Representatives to which a 
joint resolution is referred shall report 
it to the House not later than 5 cal-
endar days after the date of receipt of 
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the report described in subparagraph 
(C). If a committee fails to report the 
joint resolution within that period, the 
committee shall be discharged from 
further consideration of the joint reso-
lution and the joint resolution shall be 
referred to the appropriate calendar. 
‘‘(III) PROCEEDING TO CONSID-
ERATION.—After each committee au-
thorized to consider a joint resolution 
reports it to the House or has been 
discharged 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 resolution 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 proceed on the joint reso-
lution. The previous question shall be 
considered as ordered on the motion 
to its adoption without intervening 
motion. The motion shall not be de-
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‘‘(aa) as an exercise of the 
rulemaking power of the Senate 
and House of Representatives, 
respectively, and as such it is 
deemed a part of the rules of 
each House, respectively, but ap-
plicable only with respect to the 
procedure to be followed in that 
House in the case of a joint reso-
lution, and it supersedes other 
rules only to the extent that it is 
inconsistent with such rules; and 
‘‘(bb) with full recognition of 
the constitutional right of either 
House to change the rules (so far 
as relating to the procedure of 
that House) at any time, in the 
same manner, and to the same 
extent as in the case of any other 
rule of that House. 
‘‘(H) PENALTY RATE.— 
‘‘(i) IN GENERAL.—Not later than 6 
months after the date of enactment of this 
subparagraph, the Board shall, with re-
spect to a recipient of any loan or other fi-
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