Sponsor
Richard Lynn Scott
Senator · R-FL
Senator · R-FL
The bill increases Fed transparency and limits certain risky holdings to protect taxpayers, but those limits and new accounting rules reduce the Fed's crisis flexibility and may raise mortgage and borrowing costs while politicizing monetary policy.
Middle-class families and small-business owners receive clearer, regular reports showing how Federal Reserve policies and historical lending patterns have affected household economic prospects and credit availability.
Taxpayers and the public gain increased accountability and transparency of the Federal Reserve through GAAP accounting and mark-to-market valuation requirements, which could improve oversight and public trust.
Taxpayers face reduced exposure to certain market risks because Reserve Banks would be limited from buying longer-term Treasuries, mortgage-backed securities, or holding common stock.
Homeowners and prospective homebuyers may face tighter mortgage markets and higher mortgage rates due to a prohibition on the Fed purchasing mortgage-backed securities.
Taxpayers and middle-class families could experience higher borrowing costs during financial stress because the Fed's ability to use longer-term Treasuries and MBS purchases as crisis tools would be constrained.
The Federal Reserve (Board and FOMC) could face greater political pressure and politicization of monetary policy from detailed reports linking Fed actions to middle-class outcomes.
Based on analysis of 2 sections of legislative text.
Narrows Fed asset-purchase authority (no MBS, no Treasuries over 3 years, no post-enactment common stock) and requires new GAAP/mark-to-market accounting plus two annual reports to Congress on the middle class and small-business lending.
Official title: Limit purchases of the Federal reserve banks, to require Generally Accepted Accounting Principles standards, and for other purposes.
Introduced May 7, 2025 by Richard Lynn Scott · Last progress May 7, 2025
Requires the Federal Reserve Board, each Federal Reserve Bank, and the FOMC to produce new, regular reports and to follow GAAP accounting with mark-to-market valuation for specified disclosures, and it limits the Fed’s open-market purchase authority by banning purchases of mortgage-backed securities, common stock acquired after enactment, and Treasury securities with maturities over three years. The bill adds two annual congressional reports tracking the middle class and small-business lending, narrows what assets Reserve Banks may buy or hold, and imposes accounting and valuation rules for certain Fed reports and audits.