U.S. Senators Elizabeth Warren and Rick Scott have introduced bipartisan legislation aimed at establishing a presidentially appointed and Senate-confirmed Inspector General (IG) for the Board of Governors of the Federal Reserve System and the Consumer Financial Protection Bureau (CFPB). Currently, the IG is appointed by officials at the Federal Reserve, which raises concerns about conflicts of interest.
The Senators also addressed a letter to Federal Reserve Chairman Jay Powell regarding the selection of a new Inspector General. The previous Fed Board-appointed IG, Mark Bialek, resigned earlier this year amid criticism over his handling of ethics issues, regulatory failures, and bank collapses. In their letter, Warren and Scott recommended appointing a highly qualified and independent IG.
Elizabeth Warren stated, “The Fed makes critical decisions that impact our entire economy—and bank collapses, regulatory failures, and the culture of corruption at the Fed have underscored the urgent need for a truly independent Inspector General to hold Fed officials accountable. I’m glad to partner with Senator Scott on this bipartisan bill to deliver oversight the American people deserve.”
Rick Scott commented on the situation by saying, “The Federal Reserve has been wildly unaccountable for years under Jay Powell’s leadership, who has overseen regulatory failures, allegations of insider trading, and unethical practices at the Fed that have been overlooked and enabled by the Board’s hand-picked Inspector General. The Federal Reserve is the world’s largest and most powerful central bank, yet the current Inspector General directly reports to the Fed’s Board, presenting a clear conflict of interest with a perverse pay structure that enables issues to go unchecked for too long at the expense of the American people. That’s insane. We need significant changes at the Federal Reserve to bring transparency and accountability that American people deserve."
This legislative effort aims to implement significant changes in oversight at one of America's key financial institutions by establishing an independent IG position.