Sponsors
The bill increases transparency and accountability of the Federal Reserve—giving middle-class families, small businesses, and taxpayers clearer information and reducing some market-risk exposure—while restricting the Fed’s asset-purchase tools in ways that could raise borrowing and mortgage costs and politicize monetary policy.
Taxpayers face lower exposure to certain market risks because Reserve Banks would be barred from buying longer-term Treasuries, mortgage-backed securities, or holding common stock.
Middle-class families gain clearer, regular information about how Federal Reserve policies affect their economic prospects through required annual reports to Congress.
Federal Reserve accounting under GAAP and mark-to-market valuation requirements increases accountability and transparency, which could improve public trust and oversight of monetary policy.
Taxpayers and middle-class families may face higher borrowing costs in economic stress because constraining Reserve Bank asset purchases reduces the Fed's crisis-response toolkit.
Homeowners and prospective buyers could see tighter mortgage markets and higher mortgage rates if the Fed is prohibited from purchasing mortgage-backed securities, increasing housing costs.
Detailed reporting that ties Fed policy to middle-class outcomes risks politicizing central bank communications and subjecting monetary policy decisions to increased political pressure on Fed officials.
Based on analysis of 2 sections of legislative text.
Limits Fed purchases of long Treasuries and MBS, bans new common-stock holdings, and requires annual reports on middle-class health and small-business lending plus GAAP mark-to-market accounting.
Requires the Federal Reserve Board and each Federal Reserve Bank to produce two annual reports to Congress—one assessing the status and health of the U.S. middle class and how Fed policies affected it, and one describing how Fed actions since 2000 have affected small business lending and credit access. It also narrows the Fed’s open-market purchase authority by banning purchases of mortgage-backed securities, banning purchases of Treasury securities with maturities over three years, and banning direct or indirect holdings of common stock acquired on or after enactment. Finally, it requires the Board, FOMC, and Reserve Banks to follow generally accepted accounting principles (GAAP) and to use mark-to-market valuations for specified financial estimates in audits and reports.
Introduced May 7, 2025 by Richard Lynn Scott · Last progress May 7, 2025