Title: Independence from Credit Policy Act of 2020
Policy area: Finance and Financial Sector

Summary:
Independence from Credit Policy Act of 2020
This bill limits the types of securities that the Federal Reserve Board may acquire in the open market to gold stock; currency; and direct obligations of the United States, foreign banks, or the International Monetary Fund. The board must exchange all other assets with the Department of the Treasury for direct U.S. obligations of equivalent value.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 8984 Introduced in House (IH)]

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116th CONGRESS
  2d Session
                                H. R. 8984

To ensure that the operations of the Board of Governors of the Federal 
Reserve System remain independent from the credit policy of the United 
                    States, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           December 16, 2020

Mr. Hill of Arkansas introduced the following bill; which was referred 
                 to the Committee on Financial Services

_______________________________________________________________________

                                 A BILL


 
To ensure that the operations of the Board of Governors of the Federal 
Reserve System remain independent from the credit policy of the United 
                    States, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Independence from Credit Policy Act 
of 2020''.

SEC. 2. 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 Department of the Treasury 
                all covered assets that are neither gold stock, 
                Treasury currency, nor direct obligations 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 obligations of the 
                United States of equivalent market value to such 
                covered assets.
            (2) Covered assets defined.--In this subsection, the term 
        ``covered assets'' means all assets--
                    (A) purchased through open-market operations 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) of the Federal 
Reserve Act (12 U.S.C. 355) (relating to ``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 
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 
        inserting after subparagraph (E) 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 obligations of the United 
                States, foreign central banks, or the International 
                Monetary Fund--
                            ``(i) the Board shall transfer such assets 
                        of the Federal reserve bank to the Department 
                        of the Treasury; and
                            ``(ii) the Secretary of the Treasury shall 
                        transfer to the Federal reserve banks direct 
                        obligations of the United States of equivalent 
                        market value to the assets described in clause 
                        (i).''.
            (2) Repeal of authority to provide emergency advances to 
        groups of member banks.--Section 10A of the Federal Reserve Act 
        (12 U.S.C. 347a) is repealed.
            (3) Assets acquired through advances to member banks.--The 
        second undesignated paragraph of subsection (a) of section 10B 
        of the Federal Reserve Act (12 U.S.C. 347b(a)) is amended--
                    (A) by inserting ``not'' before ``secured by 
                mortgage loans''; and
                    (B) by striking ``lowest discount rate'' and 
                inserting ``highest discount rate''.
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