Americans for Financial Reform Sends Letter of Support for S.604 to all Democratic Legis. Assts.
United States Senate
Washington, D.C. 20510
July 29, 2009
Dear Senator,
As a coalition of nearly 200 consumer, employee, investor, community and civil
rights groups, we write you today to urge you to co-sponsor the Federal Reserve
Sunshine Act, S. 604, introduced by Senator Bernie Sanders of Vermont.
S. 604 would subject the Federal Reserve to an audit by the General Accountability
Office by the end of 2010. This audit would shed light on questions the Fed has so
far refused to answer, including the names of financial institutions that have
received special loans and the conditions under which those loans were made. The
information was previously requested through several Freedom of Information Act
filings, a lawsuit by Bloomberg News Service, and a non-binding Senate resolution
attached to the budget, without success.
In responding to the financial crisis, the Federal Reserve has committed more than
$1 trillion to aid troubled financial institutions through loans and asset purchases –
without any of the restrictions on such things as executive compensation that came
with funding from the Treasury under the Troubled Asset Relief Program (TARP).
Also, unlike the Treasury, which has posted all TARP transactions on its website, the
Fed has kept most of the transactions secret.
The need to know more about the Federal Reserve subsidies was underscored last
week with the announcement of record profits from financial giants Goldman Sachs
and JP Morgan – which plan to pay record bonuses for 2009. Both banks repaid their
TARP funds. But does taxpayer money continue to prop up their balance sheets?
Only a proper audit of the Fed’s lending practices will provide a full answer.
In creating the Federal Reserve nearly 100 years ago, the Congress envisioned a
central bank free from political pressure. But the structure that may have once
ensured independence now appears to put the Fed much closer to the financial
industry than the American people, who deserve to know who the beneficiaries are.
A companion bill, H.R. 1207, was introduced by Rep. Ron Paul and has attracted
strong bipartisan support in the House, with 279 co-sponsors. Please support
transparency at the Federal Reserve by becoming a co-sponsor of S. 604.
Sincerely,
Americans for Financial Reform
