Rick Scott, Liz Warren Unveil Bipartisan Fed Oversight Bill

Sens. Rick Scott (R-FL) and Elizabeth Warren (D-MA) are introducing legislation on Wednesday which would replace the Federal Reserve’s internal watchdog with one appointed by the president, following the failures of Silicon Valley Bank and Signature Bank.

“Our legislation fixes that by establishing a presidentially-appointed, Senate-confirmed inspector general at the Fed, like every other major government agency,” reads a joint press release from Scott and Warren, who blame the collapse of the two bangs on regulatory failures at the US central bank, which currently employs an inspector general who reports to the Fed board, according to Reuters.

According to Warren, this month’s banking failures “have underscored the urgent need for a truly independent inspector general to hold Fed officials accountable for any lapses or wrongdoing.”

The legislation was due to be introduced later on Wednesday. According to a four-page legislative text, the measure would replace the Fed’s inspector general with an independent IG who would oversee the Federal Reserve and the Consumer Financial Protection Bureau. The CFPB is an independent bureau within the central bank that is responsible for consumer protection within the financial sector.

Warren played a key role in setting up the CFPB under Democratic President Barack Obama following the 2007-2008 financial crisis. The U.S. Supreme Court last month agreed to hear a case challenging the CFPB’s funding structure, which some conservatives argue violates the U.S. Constitution. -Reuters

“We may end up in one of these strange-bedfellows situations,” said former House Financial Services Committee staffer and banking lobbyist, Chris Brown, referring to the bipartisan aspect of the legislation.

“I do think there’s overarching concern about what happened here.”

Meanwhile, House Financial Services Committee Chairman Patrick McHenry (R-NC) and Maxine Waters (D-CA) have scheduled a March 29 hearing which will feature testimony from Fed and FDIC officials.