Dear Chairman Lucas and Ranking Member Vargas:
The U.S. Chamber of Commerce (“Chamber”) offers the following comments to the House Financial Services Committee Task Force on Monetary Policy, Treasury Market Resilience, and Economic Prosperity (the “Task Force”) in advance of the March 4, 2025, hearing entitled Examining Monetary Policy and Economic Opportunity. This timely hearing provides an important opportunity to discuss the critical role and structure of the Federal Reserve System, and the steps needed to improve its regulatory functions.
The Chamber appreciates the Task Force’s leadership in addressing the operations of the Federal Reserve System, which are essential to ensuring the stability and competitiveness of the U.S. economy. As businesses across the country navigate an increasingly complex economic environment, it is imperative that policymakers prioritize measures that promote financial stability, enhance market resilience, and foster sustainable economic growth. The Chamber remains committed to working with Congress, the Administration and other stakeholders to advance regulatory reform policies that strengthen the foundation of our economy while addressing emerging challenges.
The Federal Reserve Board has a number of important functions: it is the central bank of the United States, charged with setting monetary policy; it is the supervisory regulator for bank holding companies and banks that are members of the Federal Reserve; and it is one of the primary interlocutors for international financial regulatory bodies, including the Financial Stability Board (FSB) and the Bank of International Settlements (BIS). The Dodd-Frank Wall Street Reform and Consumer Protection Act gave the Federal Reserve supervisory and prudential regulatory powers over systemically important banks and non-bank financial institutions. Many of the recommendations here can also apply to those institutions. However, we also continue to support various reforms regarding systemically important non-bank financial institutions as embodied in the Treasury Department financial regulatory reform reports issued in 2018.
The Chamber issued a report in 2016, Federal Reserve Reform: Securing Regulatory Transparency and Accountability[1] (“Federal Reserve Reform Report”) that included recommendations to make the regulatory functions of the Federal Reserve Board more transparent and accountable to the public. We believe these recommendations for reforming regulatory policy and continuing independent monetary policy are just as salient and necessary today as they were nine years ago.[2]
Separately, this report also underscores the importance of maintaining the Federal Reserve System’s independent authority to set monetary policy. While it is appropriate that Congress has set the broad objectives of U.S. monetary policy—stable prices and full employment—managing these goals requires a long-term focus, deep analytics and expertise, and flexibility. Accordingly, the Chamber believes, as did the Administration in issuing its recent Executive Order 14215, that it is important for the Federal Reserve to maintain its unique independence in the area of monetary policy.
As with any regulatory agency we believe it is important to have processes in place to ensure transparency and accountability. The recommendations outlined in the Federal Reserve Reform Report would improve the regulatory functions of the Federal Reserve that thoughtfully evaluates both individual and collective impacts on Main Street businesses and the broader economy. While some action has been taken, the following recommendations should be evaluated and necessary action taken by Congress or the Federal Reserve where appropriate.
Some of these reform principles include:
1. Maintain a transparent strategic regulatory plan.
2. Subject regulation to transparent, robust cost-benefit analysis. This analysis should include the cost and impact of regulation of the customers of banks as required by the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994.
3. Tailor rules for non-bank Systemically Important Financial Institutions.
4. Hold public meetings to consider regulations and international regulatory agreements.
5. Require more transparency on interactions with the Financial Stability Board, the Bank of International Settlement, and the International Association of Insurance Supervisors.
6. Consolidate examinations and data-collection with other regulators.
7. Enter into Memorandum of Understanding (“MOUs”) with functional regulators.
The Chamber believes that these reforms are necessary to ensure the same levels of transparency and accountability other regulators abide by and ensure that rules are written so that financial stability and robust economic growth can be achieved. The Chamber looks forward to partnering with the Task Force on this important work.
[1] U.S. Chamber of Commerce, Center for Capital Markets Competitiveness. Federal Reserve Reform: Security Regulatory Transparency & Accountability (Summer 2016), available at https://www.uschamber.com/assets/archived/images/documents/files/ccmc_-_federal_reserve_reform_agenda.pdf
[2] President Trump’s February 18, 2025, Executive Order on Ensuring Accountability for All Agencies that calls for independent agencies to submit for review all proposed and significant regulatory actions to the Office of Information and Regulatory Affairs within the Executive Office of the President that states “This order shall not apply to the Board of Governors of the Federal Reserve System or to the Federal Open Market Committee in its conduct of monetary policy. This order shall apply to the Board of Governors of the Federal Reserve System only in connection with its conduct and authorities directly related to its supervision and regulation of financial institutions.”https://www.whitehouse.gov/presidential-actions/2025/02/ensuring-accountability-for-all-agencies/
