Tipton Bill Increases Oversight over Federal Reserve
WASHINGTON D.C. — Congressman Scott Tipton’s (CO-03) Congressional Accountability for Emergency Lending Act of 2017, a bill to implement Congressional oversight over the Federal Reserve’s 13(3) Emergency Lending practices, passed out of the Financial Services Committee and will now move to the House Floor. The bill cleared the Committee with a vote of 34-25.
Speaking before the Committee, Tipton highlighted the importance of placing guardrails on the Federal Reserve’s emergency lending practices in order to provide both accountability and certainty in times of financial crisis.
“In the aftermath of the 2008 financial crisis, it became clear that rules for Section 13(3) of the Federal Reserve Act Emergency Lending procedures needed to be adjusted,” said Tipton. “Today, the Congressional Accountability for Emergency Lending Act better clarifies the emergency lending powers and procedures of the Fed and codifies the Fed’s accountability to the American taxpayer in times of crisis.”
The Congressional Accountability for Emergency Lending Act of 2017 would make the Federal Reserves’ Emergency Lending process more rigorous by requiring the Secretary of Treasury and two-thirds of the Federal Open Market Committee to agree that there are urgent circumstances that justify the Fed’s use of its authority as a lender of last resort.
The legislation does not limit the authority of the Federal Reserve to practice its emergency lending power, but it would give Congress the power of oversight over those practices, requiring Congress to pass a joint resolution to ratify any emergency loan activity from the Fed within 30 days of the extending the loan. If Congress does not approve the emergency lending activity within those 30 days, the recipient financial institution would be required to repay the loan within 30 days after Congress disapproves.