Sens. Rick Scott, Elizabeth Warren join forces for Federal Reserve oversight bill

Sens. Rick Scott (R-Fla.) and Elizabeth Warren (D-Mass.) on Wednesday unveiled legislation that would beef up oversight of the Federal Reserve following two high-profile bank failures.

The bill would require an independent inspector general, who would be appointed by the president and confirmed by the Senate, to oversee Federal Reserve Board of Governors and the Consumer Financial Protection Bureau.

The current inspector general for the Federal Reserve reports to the Fed board.

“After the Federal Reserve’s failure to properly identify and prevent the shocking failures of Silicon Valley Bank and Signature Bank, it’s clear we can’t wait any longer for big change at the Fed,” Scott said in a release announcing the bill. “It’s outrageous that the Federal Reserve, the world’s largest and most powerful central bank, does not have a truly independent inspector general to investigate it – an independent authority to fight for the transparency and accountability our citizens need.”

Warren, who has been an outspoken critic of Fed Chair Jerome Powell and his leadership of the bank, echoed the call for an independent inspector general for the Federal Reserve.

“The recent bank collapses and regulatory failures by the Fed have underscored the urgent need for a truly independent Inspector General to hold Fed officials accountable for any lapses or wrongdoing,” Warren said in the release.

Warren blasted Powell earlier this week for rolling back regulations that she argues are key in preventing irresponsible banking behavior in the industry, since he took over the top position at the bank in 2018.

“Donald Trump ran for president saying he would lighten the regulations on these banks,” Warren said during an interview on CBS’s “Face The Nation.” on Sunday. “And then Jerome Powell just literally took a flamethrower to these regulations, in order to make them less and less effective.”

Scott said in a letter to Powell on Wednesday that the Fed had failed in its duty to regulate large financial institutions.

“For too long, the Federal Reserve has used its claim of independence to thwart Congress and the American people while being unable or unwilling to properly regulate and supervise the large financial institutions under its care,” Scott wrote.