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
Some Converse copycats cost big bucks A few bargain brands got swept up in Chuck Taylor's net, but others cost a pretty penny. More
Urban infrastructure gets a second life Railroad beds become parks, power plants become aquariums and slaughterhouses are now art centers as an industrial past turns people-centric. More
Boomtown moms From working mothers raising their kids in RVs to stay-at-home moms who spend their days organizing events for the Oil Wives club, meet the moms of North Dakota's oil boom. 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

Market indexes 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. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.