GOP floats bill that would strip top Fed banking regulator title

Al Drago/Bloomberg

WASHINGTON — House Financial Services Committee Republicans have put forward draft legislation that would remove the title Vice Chair for Supervision from the Federal Reserve. 

The move —  although it's a short bill that stands little chance against a Democratic majority in the Senate —  further signals Republicans' displeasure with the Fed's banking oversight in the wake of the Silicon Valley Bank, Signature Bank and First Republic failures this spring. While its chances are slim right now, the bill portends further criticism of the Fed's banking supervision in the future, which could be especially significant depending on the results of the 2024 elections. 

The bill, which has no stated sponsors, would "remove the designation of one of the members of the Board of Governors of the Federal Reserve System as the 'Vice Chairman for Supervision.'" It would do so by striking the section of the Dodd-Frank Act that sets up the position. 

Republicans on the House Finance panel posted the discussion draft alongside several others that would require banking agencies to report various policymaking activities to Congress. It comes as the panel prepares to hear from senior staff at the Fed, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corp. in a Tuesday hearing that's part of Republicans' larger anti-ESG push. 

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Since the regional bank crisis that enveloped the financial industry earlier this year, Republicans quickly pointed fingers at the Fed's oversight of Silicon Valley Bank, the first domino to fall in the regional bank turmoil, while Democrats have tended to blame the bank's executives. 

Little banking legislation has shown promise of making it into law in the aftermath of the bank failures, with the exception of an executive compensation package coming out of the Senate Banking Committee with bipartisan support. On the House side, lawmakers have debated a number of bills earlier this year, as Republicans looked to limit some of the power of the Federal Reserve, and Democrats tempted their GOP counterparts with would-be bipartisan legislation. For Republicans' part, they focused on a number of measures that would curb the federal banking regulators powers, after what the GOP sees as a failure on the part of the Fed to supervise Silicon Valley Bank.