What Congress has in store for the Fed

Many details remain to be worked out between the House and Senate. But overall Congress is proposing dramatic changes to the Fed's mandate.

EMAIL  |   PRINT  |   SHARE  |   RSS
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
By Jennifer Liberto, CNNMoney.com senior writer

Should Ben Bernanke be confirmed for a second term as Fed chair?
  • Yes
  • No

WASHINGTON (CNNMoney.com) -- More than a year after the financial meltdown of 2008, Congress is moving forward on plans to drastically curtail the power of the Federal Reserve.

There is a debate about lawmakers' motivations, and many details must still be worked out between different proposals.

Currently, the main bills in the House and Senate differ in specifics, and the Senate would go further than the House in curbing Fed powers.

But both chambers are proposing fairly drastic changes.

  • The House and Senate both propose creating a Consumer Financial Protection Agency that would strip the Federal Reserve of its consumer oversight powers.
  • Both chambers would create a new check on the Fed's powers to step in and make emergency loans to nonbanks.
  • The Senate proposes stripping the Fed of banking oversight and giving that power to a single regulator, leaving the Fed with mostly a monetary policy role.
  • The Senate would also reshape how the 12 regional Fed boards are structured, giving Washington more say in who runs them.

Some argue that the changes are meant to be punitive and to rein in a Fed that critics say has too much power. Others say proposals would enact long-overdue changes to streamline financial regulation.

"We had too many cooks in the kitchen," said Alice Rivlin, a former Fed vice chairwoman and now a senior fellow at the the Brookings Institution. "Consolidating banking regulators would strengthen the Fed and allow it to pay attention to its main job, monetary policy." To top of page

They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
My part-time job is a dead end, but it's all I can find CNNMoney profiles 4 of America's 7 million part-time workers unable to find full-time jobs. More
Cool cars from the LA Auto Show There are some of the standout vehicles on display this year at the Los Angeles Auto Show. More
American Dream homes: Prices in 10 cities How much does the American Dream home cost? From $2 million in Los Altos, Calif., to $65,000 in Cleveland, here's what you'll pay for a 4-bedroom, 2-bath house, according to Coldwell Banker's annual survey. More
Worry about the hackers you don't know 
Crime syndicates and government organizations pose a much greater cyber threat than renegade hacker groups like Anonymous. Play
GE CEO: Bringing jobs back to the U.S. 
Jeff Immelt says the U.S. is a cost competitive market for advanced manufacturing and that GE is bringing jobs back from Mexico. Play
Hamster wheel and wedgie-powered transit 
Red Bull Creation challenges hackers and engineers to invent new modes of transportation. Play

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.