After Bernie Sanders made his deal with the Treasury Department and the Federal Reserve for a one-time audit of emergency lending programs, I figured that was about the outer edge of what the system would allow. I had people close to the process tell me “It could get better in conference,” but I didn’t think there was much of a chance of that.
The details are still being worked out, and we have to wait and see the language, but it does appear that the House did secure more disclosure, on an ongoing basis, for the Fed’s activities. Late yesterday, at the conference committee, lead Senate negotiator Chris Dodd announced that his side would accept several provisions that would add transparency to the Fed.
Specifically, the Senate accepted adding discount window and open market transactions to the GAO audit scheduled for December of this year, on top of the emergency lending under clause 13(3). In addition, there would be ongoing disclosure, with 13(3) lending participants and amounts revealed one year removed, and discount window and open market operations two years removed. Until those dates, there would be a FOIA exemption, but that actually narrows what the House sent over, which would have exempted the Fed from FOIA requests for longer.
Again, the details have not been finalized, and a couple pieces of the title are still up for grabs. There was a House provision where the Fed would have to ensure payback, to 99% accuracy, of emergency lending operations. The Senate rejected that. They also rejected a provision that would restrict currency swap authority. Both those details haven’t yet been decided. (UPDATE: More on the important currency swap provision, and what Dodd is resisting, here.)
Also to be determined is whether the head of the Federal Reserve Bank of New York will be an appointee of the White House or voted on by the member banks. The elections of the other regional Reserve Bank presidents, and even their location (there’s currently only one Reserve Bank president west of the Mississippi), are also under review.
However, on the question of audits, it looks like reformers may get more than they had a right to expect from the conference committee.
Ryan Grim has more.