,,ii  #aacth ,,congress  #ast ,session  
,s4 #ajah  ,,in ,,the ,,senate ,,of     
,,the ,,united ,,states  ,may #bb1 #bjac
 ,mr4 ,sanders 7for himself1 ,mrs4      
,boxer1 and ,mr4 ,begich7 introduced the
 following bill2 which was read twice   
and referred to the ,committee on       
,banking1 ,housing1 and ,urban ,affairs 
,a ,,bill  ,to restrict conflicts of    
interest on the boards of directors of  
,federal reserve banks1 and for other   
purposes4  #a4 ,short title ,this ,act  
may be cited as the ,federal ,reserve   
,independence ,act4  #b4 ,findings      
,congress finds the following3  7#a7 ,in
 ,october #bjaa1 the ,government        
,accountability ,office found that--    
7,a7 allowing members of the banking    
industry to both elect and serve on the 
boards of directors of ,federal reserve 
banks poses reputational risks to the   
,federal ,reserve ,system2  7,b7 #ah    
former and current members of the boards
 of directors of ,federal reserve banks 
were affiliated with banks and companies

 that received emergency loans from the 
,federal ,reserve ,system during the    
financial crisis2  7,c7 many of the     
members of the boards of directors of   
,federal reserve banks own stock or work
 directly for banks that are supervised 
and regulated by the ,federal ,reserve  
,system4 ,these board members oversee   
the operations of the ,federal reserve  
banks1 including salary and personnel   
decisions2  7,d7 under current          
regulations1 members of a board of      
directors of a ,federal reserve bank who
 are employed by the banking industry or
 own stock in financial institutions can
 participate in decisions involving how 
much interest to charge to financial    
institutions receiving loans from the   
,federal ,reserve ,system1 and the      
approval or disapproval of ,federal     
,reserve credit to healthy banks and    
banks in hazardous condition2  7,e7 #ba 
members of the boards of directors of   
,federal reserve banks were involved in 
making personnel decisions in the       

division of supervision and regulation  
under the ,federal ,reserve ,system2 and
  7,f7 the ,federal ,reserve ,system    
does not publicly disclose when it      
grants a waiver to its conflict of      
interest regulations4  7#b7 ,allowing   
currently employed banking industry     
executives to serve as directors on the 
boards of directors of ,federal reserve 
banks is a clear conflict of interest   
that must be eliminated4  7#c7 ,no one  
who works for or invests in a firm      
receiving direct financial assistance   
from the ,federal ,reserve ,system      
should be allowed to sit on any board of
 directors of a ,federal reserve bank or
 be employed by the ,federal ,reserve   
,system4  #c4 ,ending conflicts of      
interest  7a7 ,class ,a members ,the    
tenth undesignated paragraph of section 
#d of the ,federal ,reserve ,act 7#ab   
,u4,s4,c4 #cjb7 7relating to ,class ,a7 
is amended by striking chosen by and be 
representative of the stockholding banks
 and inserting designated by the ,board 

of ,governors of the ,federal ,reserve  
,system1 from among persons who are not 
employed in any capacity by a           
stockholding bank4  7b7 ,class ,b ,the  
eleventh undesignated paragraph of      
section #d of the ,federal ,reserve ,act
 7#ab ,u4,s4,c4 #cjb7 7relating to      
,class ,b7 is amended by striking be    
elected and inserting be designated by  
the ,board of ,governors of the ,federal
 ,reserve ,system4  7c7 ,limitations on 
boards of directors ,the fourteenth and 
fifteenth undesignated paragraphs of    
section #d of the ,federal ,reserve ,act
 7#ab ,u4,s4,c4 #cjc7 7relating to      
,class ,b and ,class ,c1 respectively7  
are amended to read as follows3  ,no    
employee of a bank holding company or   
other entity regulated by the ,board of 
,governors of the ,federal ,reserve     
,system may serve on the board of       
directors of any ,federal reserve bank4 
,no employee of the ,federal ,reserve   
,system or board member of a ,federal   
reserve bank may own any stock or invest

 in any company that is regulated by the
 ,board of ,governors of the ,federal   
,reserve ,system1 without exception4  4 
#d4 ,reports to ,congress ,the          
,comptroller ,general of the ,united    
,states shall report annually to        
,congress beginning #a year after the   
date of enactment of this ,act to make  
sure that the provisions of this ,act   
are followed4