I
105TH CONGRESS
1ST SESSION
H. R. 1160
To promote accountability and the public interest in the operation of the
Federal Reserve System, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
MARCH 20, 1997
Mr. GONZALEZ introduced the following bill; which was referred to the Com-
mittee on Banking and Financial Services, and in addition to the Com-
mittee on Government Reform and Oversight, for a period to be subse-
quently determined by the Speaker, in each case for consideration of such
provisions as fall within the jurisdiction of the committee concerned
A BILL
To promote accountability and the public interest in the
operation of 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.
This Act may be cited as the ‘‘Federal Reserve Audit
and Accountability Act’’.
SEC. 2. APPOINTMENT OF FEDERAL RESERVE BANK PRESI-
DENTS BY THE PRESIDENT BY AND WITH THE
CONSENT OF THE SENATE.
(a) IN GENERAL.—Section 4 of the Federal Reserve
Act is amended by inserting after the 4th undesignated
paragraph (12 U.S.C. 341; relating to general corporate
powers) the following new subsection:
‘‘(e) BANK PRESIDENTS
AND 1ST VICE PRESI-
DENTS.—
‘‘(1) 
APPOINTMENT
OF
PRESIDENT.—The
President shall appoint, by and with the consent of
the Senate, a president for each Federal reserve
bank.
‘‘(2) APPOINTMENT OF 1ST VICE PRESIDENT.—
The president of each Federal reserve bank shall ap-
point a first vice president for the bank.
‘‘(3) TERMS.—The president and first vice
president shall be appointed for terms of 5 years.
‘‘(4) DUTY OF PRESIDENT.—The president of a
Federal reserve bank shall be the chief executive of-
ficer of the bank.
‘‘(5) DUTY OF 1ST VICE PRESIDENT.—In addi-
tion to any other duties of the first vice president of
a Federal reserve bank, the first vice president shall,
in the absence or disability of the president or dur-
ing a vacancy in the office of president, serve as
chief executive officer of the bank.
‘‘(6) VACANCY.—Whenever a vacancy shall
occur in the office of the president or the first vice
president, it shall be filled in the manner provided
for the original appointment and the person so ap-
pointed shall hold office until the expiration of the
term to which such person’s predecessor was ap-
pointed.’’.
(b) TRANSITION.—
(1) PRESIDENT.—The first appointment of the
president for each Federal reserve bank which is
made in accordance with the amendment made by
subsection (a) shall take place upon the earlier of—
(A) the expiration of the term of the presi-
dent of the bank who is serving in such office
on the date of the enactment of this Act; or
(B) the occurrence of the first vacancy in
the office of president of the bank after the
date of the enactment of this Act.
(2) 1ST
VICE
PRESIDENT.—Notwithstanding
any provision of the Federal Reserve Act, the term
of the first vice president of any Federal reserve
bank who was appointed to such position before the
date of the enactment of this Act shall end as of the
date on which the president of the bank is first ap-
pointed in accordance with the amendment made by
subsection (a) and a first vice president shall be ap-
pointed in the manner provided by such amendment.
(c) TECHNICAL AND CONFORMING AMENDMENT.—
The subdivision designated ‘‘Fifth.’’ of the 4th undesig-
nated paragraph of section 4 of the Federal Reserve Act
(12 U.S.C. 341) is amended—
(1) in the 1st sentence, by striking ‘‘a presi-
dent, vice presidents, and’’; and
(2) by striking the 2d, 3d, and 4th sentences
and inserting the following new sentence: ‘‘All execu-
tive officers and all employees of the bank shall be
directly responsible to the president of the bank.’’.
SEC. 3. GAO AUDITS OF FEDERAL RESERVE BOARD AND
FEDERAL RESERVE BANKS REQUIRED; ITEM-
IZED BUDGETS.
(a) REMOVAL OF LIMITATION ON GAO AUDITS.—
Section 714(b) of title 31, United States Code, is amended
by striking the 2d sentence and inserting the following
new sentence: ‘‘In the case of any audit of the Board of
Governors of the Federal Reserve System or any Federal
reserve bank pursuant to the preceding sentence, the audit
may not include transactions for or with a foreign central
bank, government of a foreign country, or nonprivate
international financing organization or any part of any
discussion or communication among or between members
of the Board of Governors of the Federal Reserve System
or officers or employees of such Board which is related
to any such transaction.’’.
(b) GAO AUDIT OF CASH VAULTS.—Section 714 of
title 31, United States Code, is amended by adding at the
end the following new subsection:
‘‘(e) AUDIT OF FEDERAL RESERVE SYSTEM VAULT
FACILITIES.—
‘‘(1) IN GENERAL.—The Comptroller General of
the United States shall audit the vault facilities of
the Board of Governors of the Federal Reserve Sys-
tem and each Federal reserve bank at least once
every 3 years to determine if a system of proper in-
ternal controls is being maintained with respect to
each such facility.
‘‘(2) EXAMINATION OF REPORTS OF INDEPEND-
ENT AUDITORS.—The Comptroller General shall reg-
ularly examine the reports of independent auditors
who examine any vault facility referred to in para-
graph (1) to determine if such audits have been
properly performed.
‘‘(3) REPORT
OF
SIGNIFICANT
PROBLEMS.—
The Comptroller General shall report any significant
problem discovered with regard to any vault facility
referred to in paragraph (1) or any audit described
in paragraph (2) to—
‘‘(A) the Board of Governors of the Fed-
eral Reserve System;
‘‘(B) the Inspector General of the Federal
Reserve System; and
‘‘(C) the chairperson and the ranking mi-
nority member of the Committee on Banking
and Financial Services of the House of Rep-
resentatives and the Committee on Banking,
Housing, and Urban Affairs of the Senate.’’.
(c) ITEMIZED BUDGETS.—The Federal Reserve Act
(12 U.S.C. 221 et seq.) is amended by inserting after sec-
tion 11A the following new section:
‘‘SEC. 11B. ITEMIZED BUDGETS.
‘‘(a) IN GENERAL.—During the first 15 days of each
regular session of Congress, the estimated receipts and
proposed expenditures of the Board of Governors of the
Federal Reserve System and all Federal Reserve Banks
for the following fiscal year and the 2 succeeding fiscal
years shall be transmitted to the Congress.
‘‘(b) FORM OF BUDGET.—The budget submitted pur-
suant to subsection (a) shall be transmitted in the same
form and shall meet the same requirements, other than
the requirement relating to the budget message, as the
budget of the United States Government transmitted in
accordance with section 1105 of title 31, United States
Code.’’.
SEC. 4. PROMPT PUBLIC DISCLOSURE OF OPEN MARKET
COMMITTEE MEETINGS.
Section 12A of the Federal Reserve Act (12 U.S.C.
263) is amended by adding at the end the following new
subsection:
‘‘(d) PROMPT
PUBLIC
DISCLOSURES
OF
MEET-
INGS.—
‘‘(1) TRANSCRIPTION
OF
EACH
MEETING.—
Subject to paragraph (3), a written verbatim tran-
script of the discussion at each meeting of the Fed-
eral Open Market Committee shall be maintained by
the Board and made available to the public before
the end of the 1-year period beginning on the date
of the meeting and shall be treated as a Government
publication for purposes of making such material
available to depository libraries through the facilities
of the Superintendent of Documents in accordance
with chapter 19 of title 41, United States Code.
‘‘(2) PROMPT
DISCLOSURE
OF
POLICY
AC-
TIONS.—An explicit, written description of any de-
termination, decision, directive, or other conclusion
made by the Federal Open Market Committee at
any meeting of the committee, including any direc-
tive or instruction sent to any Federal reserve bank
or Federal reserve agent in connection with any
open market operation, shall be made available to
the public by the end of the 1-hour period beginning
at the time the Board or any such bank or agent be-
gins to implement any such determination, decision,
directive, conclusion, directive, or instruction.
‘‘(3) LIMITED REDACTION AUTHORITY.—
‘‘(A) IN
GENERAL.—No verbatim tran-
script made available to the public pursuant to
paragraph (1) may be redacted in any way
other than to redact a specific reference to a
foreign central bank.
‘‘(B) COMPLIANCE AUDIT.—The Comptrol-
ler General of the United States shall periodi-
cally audit compliance by the Board with the
requirements of subparagraph (A).
‘‘(4) RELEASE
OF
PRIOR
TRANSCRIPTS.—All
transcripts maintained by the Board of any meeting
of the Federal Open Market Committee which was
held more than 1 year before the date of the enact-
ment of the Federal Reserve Audit and Accountabil-
ity Act shall be made available to the public in the
manner provided under paragraph (1) no later than
December 31, 1997.
‘‘(5) MEETING
INCLUDES
EXECUTIVE
SES-
SION.—For purposes of this subsection, the term
‘meeting’ includes any executive session of the Fed-
eral Open Market Committee or any informal meet-
ing, teleconference call, or other occasion at which a
quorum of the members of the committee are par-
ticipating.’’.
SEC. 23. PRESIDENTIALLY APPOINTED INSPECTOR GEN-
ERAL FOR FEDERAL RESERVE SYSTEM.
(a) AMENDMENTS TO THE INSPECTOR GENERAL ACT
OF 1978.—The Inspector General Act of 1978 (5 U.S.C.
App.) is amended—
(1) in section 11—
(A) in paragraph (1), by inserting ‘‘the
Chairman of the Board of Governors of the
Federal Reserve System;’’ after ‘‘the Chair-
person of the Federal Deposit Insurance Cor-
poration;’’; and
(B) in paragraph (2), by inserting ‘‘the
Board of Governors of the Federal Reserve Sys-
tem,’’ after ‘‘the Federal Deposit Insurance
Corporation,’’;
(2) by redesignating section 8H as 8I and in-
serting after section 8G the following new section:
‘‘SEC. 8H. SPECIAL PROVISIONS CONCERNING THE FED-
ERAL RESERVE BOARD.
‘‘(a) DELEGATION.—The Chairman of the Board of
Governors of the Federal Reserve System may delegate
the authority specified in the second sentence of section
3(a) to the Vice Chairman of the Board of Governors of
the Federal Reserve System, but may not delegate such
authority to any other officer or employee of the Board
or any Federal reserve bank.
‘‘(b) PERSONNEL.—Notwithstanding paragraphs (7)
and (8) of section 6(a), the Inspector General of the Board
of Governors of the Federal Reserve System may select,
appoint, and employ such officers and employees as may
be necessary for carrying out the functions, powers, and
duties of the Office of Inspector General and to obtain
the temporary or intermittent services of experts or con-
sultants or an organization of experts or consultants, sub-
ject to the applicable laws and regulations that govern
such selections, appointments, and employment, and the
obtaining of such services, with the Federal Reserve Sys-
tem.
‘‘(c) CLARIFICATION OF AUTHORITY.—The authority
of the Inspector General of the Board of Governors of the
(2) DEFINITION.—For purposes of paragraph
(1), the term ‘‘successor’’ may include the individual
holding the position of Inspector General of the
Board of Governors of the Federal Reserve System
on or after the date of enactment of this Act.
Æ