SCR61

A Concurrent Resolution urging Congress and the President of the United States to enact the “Federal Reserve Transparency Act of 2017,” H.R.24 and S.16.

Whereas, The Federal Reserve Act of 1913 established the Federal Reserve System as the central bank of the United States; and

Whereas, The Federal Reserve plays an authoritative role in our nation’s economic life as it purports to set monetary policy to promote maximum employment, stable prices, and moderate long-term interest rates; supervise and regulate banking institutions; act to maintain the stability of the nation’s banking and financial system; and provide financial services to depository institutions, the United States government, and foreign official institutions; and

Whereas, Even though statutes set forth the objectives of monetary policy and Congress oversees the Federal Reserve, the central bank enjoys far-reaching instrument independence in that it is free to execute its statutory authority without total accountability to either the President or Congress; and

Whereas, Current law mandates that the Comptroller General of the United States audit the Federal Reserve but exempts from any audit deliberations, decisions or actions on monetary policy matters; transactions made under the direction of the Federal Open Market Committee; and transactions for or with a foreign central bank, foreign government or nonprivate international financing organization; and

Whereas, It took historic grassroots pressure to place a requirement in the federal “Dodd-Frank Wall Street Reform and Consumer Protection Act,” Public Law 111–203, which prodded a reluctant Federal Reserve into releasing in December 2010 previously undisclosed details on the gargantuan scale of emergency funding it had provided in the wake of the financial crisis that began in the summer of 2007; and

Whereas, It emerged that, during the financial crisis, the Federal Reserve had abused its statutory instrument independence and the prohibition of congressional audits of some of its activities when it made trillions of dollars in near zero-interest loans to banks, investment firms, institutional investors, and non-banking companies; purchased longer-term securities, such as troubled mortgage-backed securities; backed small business, auto, student, and credit card loans; and engaged in currency swap agreements with foreign central banks; and

Whereas, The Federal Reserve has implemented a policy termed “quantitative easing,” whereby the Federal Reserve purchases United States government debt with newly created United States currency; and

Whereas, Americans have a right to learn about the Federal Reserve’s monetary activities and impact on the nation’s money supply; and

Whereas, An exhaustive audit of all of the accounts and operations of the Federal Reserve is a prerequisite for thoughtful deliberations of the mission and functions of the Federal Reserve, the policy instruments it ought to be given, and the appropriate level of oversight to which the central bank ought to be subjected; and

Whereas, The “Federal Reserve Transparency Act of 2017,” H.R.24 and S.16, removes all restrictions currently preventing the Comptroller General of the United States from exhaustively auditing the Federal Reserve and requires the completion of an exhaustive audit within one year after the date of enactment; now, therefore,

Be It Resolved by the Senate of the State of New Jersey (the General Assembly concurring):

1. The United States Congress and the President of the United States are respectfully urged to enact H.R.24 and S.16, the “Federal Reserve Transparency Act of 2017,” so that the Comptroller General of the United States is directed to conduct a full and complete audit of the Board of Governors of the Federal Reserve System and the Federal Reserve banks within one year after the date of enactment.

2. Copies of this resolution, as filed with the Secretary of State, shall be transmitted by the Clerk of the General Assembly or the Secretary of the Senate to the President of the United States, the Majority and Minority Leaders of the United States Senate, the Speaker and Minority Leader of the United States House of Representatives, and to every member of Congress elected from this State.

STATEMENT

This concurrent resolution urges Congress and the President of the United States to enact the “Federal Reserve Transparency Act of 2017,” H.R.24 and S.16. The act removes all restrictions currently preventing the Comptroller General of the United States from exhaustively auditing the Federal Reserve and requires the completion of a full and complete audit within one year after the date of enactment. The audit is necessary to ascertain the scale of the Federal Reserve’s monetary activities and impact on the nation’s money supply. Only detailed knowledge of the Federal Reserve’s actions will facilitate an intelligent debate on the mission and functions of the Federal Reserve, the policy instruments it ought to be given, and the appropriate level of oversight to which the central bank ought to be subjected.