The top Republican on the Senate Banking Committee said Congress should weigh an overhaul of the U.S. Federal Reserve Regional Bank system and consider consolidating regional banks that are “wandering” into issues such as climate change.
Sen. Pat Toomey of Pennsylvania said Thursday that the 12 regional banks were formed to manage the economies in their districts, but that largely ended in the 1930s as oversight was taken over by the central bank. That’s left the regional banks without a clear mandate, he said.
“One of the things that concerns me is in the absence of having a compelling monetary policy purpose, they seem to be wandering into other fields they like to play on but which have nothing to do with the Fed’s mission and purpose, things like climate change, things like social justice,” he said in an interview on Bloomberg Television’s “Balance of Power With David Westin.”
Toomey said he is also concerned that the Fed is not being transparent with the public and has been “stonewalling” congressional inquiries into bank decisions. He said lawmakers should consider making the Fed subject to the records request law, the Freedom of Information Act, like other federal entities are.
Several Senate Republicans have been increasingly critical of the Fed in recent months, saying that the central bank has been too slow to respond to rising prices. GOP members of Congress have also said they’re concerned that the Fed is using its role to promote renewable energy and punish the oil and gas sector.
“It is time for Congress to rethink their role,” he said. “I do not think the status quo is acceptable.”
Toomey said a recent example of a lack of transparency from the regional banks has surfaced as he has tried to gain information about Sarah Bloom Raskin, a former Fed official, who is currently President Biden’s nominee to be Fed vice chair for supervision.
Toomey has raised questions about whether Raskin used her connections at the Fed to help a fintech company where she was a director get access to an account typically given to banks. Toomey said he hasn’t been able to get adequate responses from the Kansas City Fed, which was involved in the decision.
A White House spokesman has said that Raskin complied with all ethics requirements.
