Elizabeth Warren has been talking about the conflict of interest inherent in having Jamie Dimon sit on the board of directors of the Federal Reserve Bank of New York. Timothy Geithner even recognizes a problem, though he limits it to the appearance of impropriety rather than the impropriety itself.

Now there’s actual legislation to go along with this discussion. Bernie Sanders and Barbara Boxer have co-authored a bill that would ban bankers from sitting on the boards of directors at the regional Fed banks.

“How do you sit on a board, which approves $390 billion of low-interest loans to yourself?” Sanders said at a news conference rolling out the bill. “Who in America thinks that makes sense?”

Under the bill sponsored by Boxer and Sanders, two of the most liberal members of the Senate, people who work for or invest in companies that can receive financial aid from the Federal Reserve would be banned from sitting on any of the Fed’s 12 boards of directors. Federal Reserve workers and board members would also be barred from owning stock in firms that the Fed oversees. The bill is also co-sponsored by Sen. Mark Begich (D-Alaska).

A 2011 Government Accountability Office study that Sanders requested as part of the Dodd-Frank financial reform bill warned of “reputational risks” to the Federal Reserve system because of its affiliation with financial executives. The GAO said there were 18 past and current members of the Federal Reserve’s board tied to firms that got emergency Fed loans during the financial crisis.

Incidentally, the legislation would work in the other direction as well: no Fed employees or board members would be allowed to invest in companies over which the Fed has oversight responsibility.

We just put policies in place with Dodd-Frank that bar Class A directors – basically bankers – from electing Fed Presidents. That basically admits that conflict of interest is a problem that needs to be remedied with bright lines. There’s no reason not to go the extra step, and keep bankers off the boards of the regional central banks that are supposed to engage in regulating them.

Before you turn away, I think there’s a significant possibility of getting this bill done, and making an incremental step in wresting away government policy from financial elites. Sanders has made in-roads before on Fed policy with Ron Paul, and if he can get that kind of a trans-partisan coalition going, the opportunity exists for scaring the elites enough to make this happen. And it might even appeal to the Senate Democratic leadership, as a way to respond to the Fail Whale trades that really wouldn’t be all that punitive. This is more of a symbolic step than anything; it’s not like Jamie Dimon would have no way to influence Fed policy if he was barred from the board. But it’s a symbolic step in the right direction, and could lead to a significant reordering at the Fed. For instance, only having one Fed regional bank beyond Missouri makes little sense given current population shifts. And there are plenty of ways that Congress can get more oversight responsibilities over the Fed. The hope is that, if this recommendation from Sanders’ Fed audit could get operationalized, we could look at other aspects of that document and start to put them in motion. And the trans-partisan coalition could continue to make progress.

Sanders’ full statement is here.