Republican U.S. Senator Rick Scott, Democrat Warren unveil Fed oversight
bill
Send a link to a friend
[March 23, 2023]
By David Morgan
WASHINGTON (Reuters) -A conservative Republican and a progressive
Democrat in the U.S. Senate are introducing legislation on Wednesday to
replace the Federal Reserve's internal watchdog with one appointed by
the president, aiming to tighten bank supervision following the failures
of Silicon Valley Bank and Signature Bank.
Republican Rick Scott and Democrat Elizabeth Warren blamed the collapse
of the two banks on regulatory failures at the U.S. central bank, which
has operated up to now with an internal inspector general who reports to
the Fed board.
"Our legislation fixes that by establishing a presidentially-appointed,
Senate-confirmed inspector general at the Fed, like every other major
government agency," Scott said in a joint release with Warren.
![](http://archives.lincolndailynews.com/2023/Mar/23/images/ads/current/hopedaleag_sda_SFARM_2023.png)
Warren said this month's banking upheavals "have underscored the urgent
need for a truly independent inspector general to hold Fed officials
accountable for any lapses or wrongdoing."
The Federal Reserve had no comment on the measure.
The legislation, introduced on Wednesday, would replace the Fed's
inspector general with an independent IG who would oversee the Federal
Reserve and the Consumer Financial Protection Bureau.
The CFPB, responsible for consumer protection within the financial
sector, is technically housed within the Fed system but operates
entirely on its own, save for one key factor: It is funded by transfers
from the Fed.
Warren played a key role in setting up the CFPB under Democratic
President Barack Obama following the 2007-2008 financial crisis. The
U.S. Supreme Court last month agreed to hear a case challenging the
CFPB's funding structure, which some conservatives argue violates the
U.S. Constitution,
The cooperation between Scott and Warren, who usually inhabit opposite
poles of the political spectrum, could be the start of a new bipartisan
push on banking.
[to top of second column]
|
![](../images/032323PIX/news_u24.jpg)
U.S. Senator Rick Scott (R-FL) holds a
news conference on Capitol Hill in Washington, U.S., December 7,
2022.REUTERS/Evelyn Hockstein/File Photo
![](http://archives.lincolndailynews.com/2023/Mar/23/images/ads/current/safetytip_sda_peasley_2023.png)
Warren is a leading voice on financial matters. She sits on both the
Senate Banking Committee and the Senate Finance Committee, and
chairs subcommittees of both panels.
Scott, a former Florida governor, is a hardline conservative who has
positioned himself as a leading fiscal hawk.
The show of bipartisanship poses a stark contrast with the partisan
standoff between Republicans and Democratic President Joe Biden over
the nation's $31.4 trillion debt ceiling, which has raised concerns
in the financial markets about a prolonged debate that could damage
the U.S. economy.
Both Republicans and Democrats have pledged tighter oversight of
banking regulators following the collapses of Silicon Valley Bank
and Signature Bank, which were followed by billions of dollars in
losses for financial stocks.
"We may end up in one of these strange-bedfellows situations," said
Chris Brown, a banking lobbyist and former staffer on the House of
Representatives' Financial Services Committee, which oversees the
banking industry.
"I do think there's overarching concern about what happened here,"
he said.
House Financial Services Committee Chairman Patrick McHenry, a North
Carolina Republican, and the panel's top Democrat, Maxine Waters,
have jointly scheduled a March 29 hearing on the banking system that
will present testimony from officials with the Fed and the Federal
Deposit Insurance Corporation (FDIC).
![](http://archives.lincolndailynews.com/2023/Mar/23/images/ads/current/railer_norapeters_sda_LCHSBOARD_2023.png)
(Reporting by David Morgan and Heather Timmons; Editing by Scott
Malone, Jonathan Oatis and Nick Zieminski)
[© 2023 Thomson Reuters. All rights
reserved.]This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content. |