Senator working to rebuild trust in the American banking system by strengthening oversight and accountability
WASHINGTON – Arizona senior Senator Kyrsten Sinema introduced the bipartisan Federal Reserve Transparency Act alongside Senators Thom Tillis (R-N.C.), Elizabeth Warren (D-Mass.), Mike Rounds (R-S.D.), Richard Blumenthal (D-Conn.), Cynthia Lummis (R-Wyo.), Ted Cruz (R-Texas), and J.D. Vance (R-Ohio).
The senators’ bipartisan legislation follows the collapse of Silicon Valley Bank – bringing much-needed transparency and allowing congressional oversight of Federal Reserve regulation and supervision.
“We’re working to restore Arizonans’ confidence in our modern banking system, so they can have peace of mind that their hard-earned money is safe,” said Sinema, a member of the Senate Banking Committee.
The Sinema-backed Federal Reserve Transparency Act increases oversight of the Federal Reserve, specifically:
- Subjecting regional Federal Reserve Banks to certain Congressional Freedom of Information Act requests, which they are currently not required to do.
- Allowing any Member of Congress to obtain ethics-related information from any of the financial regulators – including the Fed Board and Reserve Banks, FDIC, and others.
- Allowing certain Members of Congress to obtain confidential supervisory information from the regulators.
- Requiring both Chair and Ranking Member’s support to publicly disclose any information derived from financial regulators – meaning no member or party can unilaterally disclose sensitive information.
- Making the Federal Reserve Inspector General a presidentially-appointed and Senate-confirmed position.
Importantly, the bipartisan legislation strengthens transparency and increases accountability in response to recent bank failures while also including key safeguards that preserve the Federal Reserve’s longstanding independence in setting monetary policy.
Earlier this week, Sinema sent a letter urging the U.S. Government Accountability Office to conduct an independent investigation into federal regulators’ failure to conduct proper oversight of Silicon Valley Bank (SVB). Prior to sending the letter, Sinema uncovered in a Banking Committee hearing that there was a substantial lag between when Silicon Valley Bank’s problems were first raised in 2021 and insufficient action was taken before its collapse earlier this month.
In the wake of SVB’s collapse, Sinema and Republican Senator Thom Tillis (N.C.) led a bipartisan group of Senators questioning the Federal Reserve about clear warning signs – including bank leadership’s clear failure to appropriately manage customer deposits – it missed as part of its responsibilities to conduct oversight and examinations ahead of Silicon Valley Bank’s collapse. Sinema additionally cosponsored the DEPOSIT Act – legislation that would claw back profits made by bank executives on the sale of stocks and compensation bonuses earned within 60 days of a bank failure.