March 22, 2023

Warren, Scott Lead Bipartisan Legislation to Establish Independent IG Oversight at the Federal Reserve

Text of Bill (PDF)

Washington, D.C. – Today U.S. Senators Elizabeth Warren (D-Mass.) and Rick Scott (R-Fla.) introduced bipartisan legislation to require a presidentially-appointed and Senate-confirmed Inspector General to the Board of Governors of the Federal Reserve System and the Bureau of Consumer Financial Protection. Following the collapse of Silicon Valley Bank (SVB) and Signature Bank and the Federal Reserve’s gross mismanagement and lack of oversight to prevent the situation, this bill will bring the serious changes and accountability to the Federal Reserve that’s clearly overdue and necessary to protect American families and workers.

“The recent bank collapses and regulatory failures by the Fed have underscored the urgent need for a truly independent Inspector General to hold Fed officials accountable for any lapses or wrongdoing,” said Senator Warren. “Last year, during the largest ethics scandal in the history of the Federal Reserve System, I led a bipartisan bill to bolster accountability at the Fed and I appreciate Senator Scott's work to advance this effort.”

 “After the Federal Reserve’s failure to properly identify and prevent the shocking failures of Silicon Valley Bank and Signature Bank, it’s clear we can’t wait any longer for big change at the Fed,” said Senator Scott. “It’s outrageous that the Federal Reserve, the world’s largest and most powerful central bank, does not have a truly independent Inspector General to investigate it – an independent authority to fight for the transparency and accountability our citizens need. Our legislation fixes that by establishing a presidentially-appointed, Senate-confirmed inspector general at the Fed, like every other major government agency. Consumers and American families must not bear the brunt of the failures of gross mismanagement and greed at their banks or the incompetence and misdeeds of the government regulators who are there to protect them. This is common sense and should have the bipartisan support of our colleagues so that it can quickly pass and become law.”

Senator Warren is a leading voice on the financial system, advocating for critical regulations to protect consumers, the financial system, and the economy:

  • On March 22, 2023, Senators Warren, Tammy Duckworth (D-Ill.), Richard Blumenthal (D-Conn.), Bernie Sanders (I-Vt.), Jack Reed (D-R.I.), Mazie Hirono (D-Hawaii), Ed Markey (D-Mass.), Angus King (I-Maine), Sheldon Whitehouse (D-R.I.), Tina Smith (D-Minn.), Chris Van Hollen (D-Md.), and Brian Schatz (D-Hawaii) sent a letter to the Vice Chair for Supervision of the Federal Reserve Michael Barr, calling on him to exercise the Fed’s authority to apply stronger regulation and supervision to banks with assets totaling $100 to $250 billion.
  • On March 19, 2023, Senator Warren sent a letter to the Inspectors General at the Department of Treasury, the Federal Deposit Insurance Corporation, and the Fed, urging them to immediately open a thorough, independent investigation of the causes of the bank management and regulatory and supervisory problems that resulted in this month’s failure of Silicon Valley Bank and Signature Bank and deliver preliminary results to Congress and the public within 30 days. 
  • On March 14, 2023, Senator Warren and Representative Katie Porter (D-Calif.) led dozens of Democratic lawmakers to introduce the Secure Viable Banking Act, legislation that would repeal Title IV of the Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018 following the collapse of SVB and Signature Bank. In 2018, Senator Warren was outspoken about the dangers of passing the Economic Growth, Regulatory Relief, and Consumer Protection Act, which reduced critical oversight and capital requirements for large banks. 
  • On March 14, 2023, Senator Warren sent a letter to ex-SVB CEO Greg Becker, asking for answers about his and SVB lobbyists’ efforts to roll back Dodd-Frank rules prior to the collapse of the bank.
  • On March 14, 2023, Senator Warren called on Federal Reserve Chair Jay Powell to recuse himself from the Federal Reserve’s announced internal review of its supervision and regulation of SVB.
  • On March 13, 2023, Senator Warren published an op-ed in the New York Times calling Congress and federal regulators to strengthen weakened rules to avoid another crisis, intensify bank oversight, reform deposit insurance, and hold SVB executives accountable for any malfeasance or mismanagement that led to its failure.
  • On March 10, 2023, Senator Warren released a statement following the collapse of SVB.
  • On December 9, 2022, Senator Warren and former Senator Pat Toomey (R-Pa.) announced the bipartisan Financial Regulators Transparency Act, legislation that would strengthen Federal Reserve accountability and ensure that no financial regulator can withhold critical ethics-related information from Congress. The bill would subject the regional Federal Reserve Banks to the Freedom of Information Act and ensure their responsiveness to congressional information requests; align the Fed with other large agencies by making its Inspector General a presidential appointee; and prohibit all financial regulatory agencies from denying congressional requests for ethics-related information.  

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