Lawmakers renew legislation mandating an independent inspector general for the Federal Reserve.
In a bid to enhance accountability and transparency within the Federal Reserve, a bipartisan legislative effort has been introduced, led primarily by Senators Rick Scott (R-FL) and Cynthia Lummis (R-WY). The proposed legislation aims to establish an independent, presidentially-appointed, and Senate-confirmed Inspector General (IG) for the Federal Reserve[1][2][3].
The current IG, who answers to the Fed board, has been criticized for a perceived lack of independence. Supporters of the bill argue that this arrangement poses a conflict of interest, as the IG is tasked with overseeing and holding accountable Fed officials who have appointed the person in the role[3].
This push for reform is part of a broader legislative package from Senator Scott, which includes the Regular Order for Investments (ROI) of the Federal Reserve Act, Right Size the Federal Reserve Act, Rein in the Federal Reserve Act, and the Fiscal Accountability for Interest on Reserves (FAIR) Act. These measures target interest payments on bank reserves by the Fed, as well as Fed accountability and fiscal policies impacting taxpayers[1][2].
The motivation for these reforms arises from a perceived failure of Fed leadership to provide stability, transparency, and accountability. Critics argue that Fed policies have cost taxpayers trillions and fostered corruption[1][2]. Senators Scott and Lummis view this reform as necessary to restore fiscal sanity and put American families’ interests first.
Senator Scott has been a vocal advocate for Fed accountability, having previously called for full audits and legislative reforms[1][2]. However, no direct mention of previous bipartisan bills becoming law or independent IG bills passed is found in the current search results, suggesting the 2025 effort is a resurgence or reinforcement of past initiatives.
In addition to the Federal Reserve, Senators Elizabeth Warren (D-MA) and Rick Scott are introducing legislation to establish an independent IG for the Consumer Financial Protection Bureau as well[4].
Recent controversies, such as Fed leaders making trades of individual stocks and investments while setting monetary policy in response to the COVID-19 pandemic, have further fueled the call for reform[5]. Senators Warren and Scott have urged Fed Chair Jerome Powell to appoint a new IG with a history of holding government officials accountable for corruption and mismanagement[6].
A Fed spokesperson has confirmed receiving a letter regarding the legislation and plans to respond[7]. The bill is reminiscent of a similar bill introduced by the senators two years ago, amid regional bank failures in 2023[8].
Notably, Senator Scott is an ally of President Donald Trump, who has complained about the Fed chair. Warren, on the other hand, is a frequent critic of Powell[4][7].
References: 1. The Hill 2. CNN 3. Politico 4. Reuters 5. Bloomberg 6. The Wall Street Journal 7. NPR 8. The Washington Post
- The push for the establishment of an independent Inspector General at the Federal Reserve, led by Senators Rick Scott and Cynthia Lummis, is not only limited to the current bipartisan legislative effort, but also encompasses broader discussions around policy-and-legislation and general-news.
- The ongoing debates about the reform of the Federal Reserve have been influenced by recent political controversies involving crime-and-justice issues, such as Fed leaders making individual stock trades while setting monetary policy in response to the COVID-19 pandemic, which has further escalated the call for accountability and transparency in the Federal Reserve.
