Restore a Full Audit of the Fed!

Ron Paul and others fought to restore language that would make possible a full audit of the Federal Reserve. And get this, powerful Democratic Representative Barney Frank supported Paul! If Rep. Frank is for real on this, and not just trying to look good to his constituents to get votes in November, then hats off to him and any member of Congress who supports a full Fed audit. I can’t believe the mainstream media completely ignored this monumental story.

Congressman Ron Paul spoke up during discussion on a motion to instruct conferees on HR 4173, the so-called “Wall Street Reform and Consumer Protection Act of 2009” which later passed and was signed into law on July 21, 2010.

The 1,300-page bill establishes a Consumer Financial Protection Agency, a systemic-risk oversight council, new capital requirements for financial institutions, and a “resolution” authority for non-banks. It also requires financial products like derivatives to be more transparent, overhauls rating agency laws, changes securitization rules, and alters the FDIC bank rescue fund.

Critics, however, say the bill will hurt small business and reduce competition. “The Wall Street Reform and Consumer Protection Act represents a major intrusion by government into this important sector of the economy,” FreedomWorks reports today. “With new fees, regulations, and reporting requirements, the legislation threatens jobs, global competitiveness, and economic growth. At the same time, the legislation creates sweeping new powers for the oversight of private businesses, from insurance to banks to mortgage brokers. Ultimately, consumers may bear the brunt of the legislation. For example, regulations released by a new consumer protection agency may have unintended consequences that reduce access to credit while raising the price of credit.”

Dennis Kucinich praised the efforts of Paul and Alan Grayson to include in the bill the authority of the GAO to conduct audits of the Federal Reserve. However, he writes, “the financial crisis — and the government’s extraordinary response — taught us monetary policy and regulatory policy must be exclusive. Relying on one entity to conduct both activities so vital to a healthy financial system will inevitably give rise to conflicts of interest. This bill, however, further conflates these policies at the Fed by giving the Fed more regulatory authority.”

In other words, regardless of the prospect of an audit of the Fed, the bill invests even more power in the Federal Reserve.

On July 29, 2010 Congressman Ron Paul introduced the SEC Transparency Act of 2010 (HR 5970), a bill designed to force greater transparency in the Securities and Exchange Commission. The bill is designed to repeal the amendments made by section 929I of the Dodd-Frank Wall Street Reform and Consumer Protection Act relating to the confidentiality of materials submitted to the Securities and Exchange Commission.

Recent news reports have publicized the little-noticed provision in the recently-passed financial reform package that the Securities and Exchange Commission has used to deny requests for information under the Freedom of Information Act. Paul’s bill would repeal the provision in the newly-passed legislation the SEC has used to deny FOIA requests.

Filed under Federal Reserve by  #