113 HR 1174 IH: Sound Dollar Act of 2013
U.S. House of Representatives
2013-03-14
text/xml
EN
Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.
1.Short title; table of
contents
(a)This Act may be cited
as the Sound Dollar Act of
2013
.
(b)The table of contents for this Act is as follows:
Sec. 1. Short title; table of contents.
Title I—Single Mandate for Price Stability Act
Sec. 101. Findings.
Sec. 102. Price stability mandate.
Title II—Financial Stability and Moral Hazard Mitigation
Act
Sec. 201. Findings.
Sec. 202. Lender-of-last-resort policy.
Title III—Diversifying the Federal Open Market Committee to
Reflect a 21st Century Economy Act
Sec. 301. Findings.
Sec. 302. Federal Open Market Committee membership.
Title IV—Demystification of Monetary Policy Decisions
Act
Sec. 401. Findings.
Sec. 402. Release of transcripts.
Title V—Exchange Rate Responsibility Act
Sec. 501. Findings.
Sec. 502. Report on the effect of exchange rate
policy.
Sec. 503. Renaming of Exchange Stabilization Fund.
Sec. 504. Conversion to all-SDR Fund.
Title VI—Credit Allocation Neutrality Act
Sec. 601. Findings.
Sec. 602. Limitation on certain non-emergency security
purchases.
Title VII—Bureau of Consumer Financial Protection Funding
Act
Sec. 701. Findings.
Sec. 702. Bureau of Consumer Financial Protection
Funding.
<enum>I</enum><header>Single Mandate for
Price Stability Act</header>
<section commented="no" id="HFACB59CF424949229D223C13DA34591B"><enum>101.</enum><header>Findings</header><text display-inline="no-display-inline">The Congress finds the following:</text>
<paragraph commented="no" id="H1792DD44CF9D4B638D51CEE043B38832"><enum>(1)</enum><text display-inline="yes-display-inline">Monetary policy can only affect the level
of employment in the short term because nonmonetary factors determine the level
of employment in the long term. At best, the Federal Reserve may temporarily
increase the level of employment through monetary policy, but such efforts risk
the possibility of price inflation and increased business cycle volatility in
the future. However, the Federal Reserve can achieve price stability in the
long term through monetary policy. Price stability is desirable because both
price inflation and price deflation damage the U.S. economy. Therefore, to
maximize long-term economic growth and achieve the highest sustainable level of
real output and employment, price stability should be the objective of monetary
policy.</text>
</paragraph><paragraph commented="no" id="HC7ED8E102906480DA6956C1BCFC9B30D"><enum>(2)</enum><text>Countries whose
central bank has a single mandate for price stability generally have a better
record of achieving stable prices than countries whose central bank has a
mandate that gives equal weight to other objectives such as maximum employment
or low interest rates.</text>
</paragraph><paragraph commented="no" id="H98F42E08E7DF4B488716EE6EA415D9DB"><enum>(3)</enum><text>In general, an
overly accommodative monetary policy inflates both asset prices and prices for
goods and services. However, an overly accommodative monetary policy may
sometimes cause a misallocation of capital that inflates asset prices
disproportionately, creating unsustainable bubbles in asset prices, while
prices indices for goods and services do not register significant price
inflation. When asset bubbles burst, many investments must be liquidated at
considerable cost to the U.S. economy in terms of lower real output and
employment.</text>
</paragraph><paragraph commented="no" id="HBA971F7FF5D54357A359FAF008345CA7"><enum>(4)</enum><text display-inline="yes-display-inline">Price stability cannot always be measured
solely through price indices for goods and services since such indices exclude
changes in asset prices. Therefore, the Federal Reserve should monitor (A) the
prices of, and the expected returns from, major asset classes (including
equities, residential real estate, commercial and industrial real estate,
agricultural real estate, gold and other commodities, corporate bonds, U.S.
Government bonds, State and local government bonds, and other securities), (B)
the value of the U.S. dollar relative to other currencies, and (C) the value of
the United States dollar relative to gold, as metrics to determine whether the
Federal Reserve’s monetary policy is consistent with long-term price
stability.</text>
</paragraph></section><section id="HCE082A03767747468C49C81C517BB370"><enum>102.</enum><header>Price stability
mandate</header>
<subsection id="H748B62F0AD6040F8AB29F885592DB1C7"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">Section 2A of the
Federal Reserve Act is amended—</text>
<paragraph id="H8DB6574D86334D51A40924A2BC6E4397"><enum>(1)</enum><text display-inline="yes-display-inline">by striking <quote>maintain long run growth
of the monetary and credit aggregates commensurate with the economy’s long run
potential to increase production, so as to promote effectively the goals of
maximum employment, stable prices, and moderate long-term interest
rates</quote> and inserting <quote>pursue the goal of long-term price
stability, in order to achieve the maximum sustainable rate of output growth
and the maximum level of employment through time</quote>;</text>
</paragraph><paragraph id="H6E0FA19E8D5A4420A2F3C2FFCB3A2764"><enum>(2)</enum><text>by striking
<quote>The Board of Governors</quote> and inserting the following:</text>
<quoted-block display-inline="no-display-inline" id="HD02363144EF142A8A354D394BEC6DDE8" style="OLC">
<subsection id="HB4BE63FA8E284D368D9EC2D98FC3A7CA"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">The Board of
Governors</text>
</subsection><after-quoted-block>;
and</after-quoted-block></quoted-block>
</paragraph><paragraph id="H21072FE18FCB4630966F926567E5FD2B"><enum>(3)</enum><text>by adding at the
end the following:</text>
<quoted-block display-inline="no-display-inline" id="H89D48EE4DEB249A5A6EEADBC55AC0BB8" style="OLC">
<subsection id="HB09F4DDF35CE4375BEB15643463A1D83"><enum>(b)</enum><header>Price stability
metrics</header>
<paragraph id="HB21C4F05047F4516A7C72C7FD0E61F10"><enum>(1)</enum><header>In
general</header><text>The Board of Governors of the Federal Reserve System and
the Federal Open Market Committee shall—</text>
<subparagraph id="H29607045FF4D4930B91B725A0F4866C8"><enum>(A)</enum><text>define the term
<quote>long-term price stability</quote> for purposes of subsection (a);
and</text>
</subparagraph><subparagraph id="H0B2FFDFF0FD148059D8CED673B64F358"><enum>(B)</enum><text display-inline="yes-display-inline">establish metrics that the Board and the
Committee will use to evaluate whether long-term price stability is being
achieved.</text>
</subparagraph></paragraph><paragraph id="H3A4C66BB69E94E6AA4020162E4224B51"><enum>(2)</enum><header>Establishment of
metrics</header><text display-inline="yes-display-inline">In establishing the
metrics described under paragraph (1)(B), the Board and Committee shall—</text>
<subparagraph id="H368A9C4A1F864F78B329D12C6D7ECA30"><enum>(A)</enum><text>take into
consideration price indices of goods and services; and</text>
</subparagraph><subparagraph id="H909A8B5496224A319D15CF45E8C6D291"><enum>(B)</enum><text display-inline="yes-display-inline">evaluate, on an ongoing basis—</text>
<clause id="H64F25E93103041E29E6A7873B3BF2125"><enum>(i)</enum><text>whether such
metrics are comprehensively reflecting price movements in the economy;
and</text>
</clause><clause id="H66E7440CFB104AD0812D2290FECDF849"><enum>(ii)</enum><text display-inline="yes-display-inline">whether any price movements not captured by
the price indices of goods and services are causing a significant misallocation
of capital in the United States economy.</text>
</clause></subparagraph></paragraph><paragraph id="H1179A3BD5BDF460FA9D52DF19F6C4178"><enum>(3)</enum><header>Metric
evaluation</header><text display-inline="yes-display-inline">The Board and
Committee shall, with respect to the evaluation process required pursuant to
paragraph (2)(B), monitor—</text>
<subparagraph id="H4A6A538CEBA04CFBB36F8B22574713C2"><enum>(A)</enum><text display-inline="yes-display-inline">the prices of, and the expected returns
from, major asset classes (including equities, residential real estate,
commercial and industrial real estate, agricultural real estate, commodities,
corporate bonds, State and local government bonds, and other securities) and
the allocation of capital in financial markets and the broader economy;</text>
</subparagraph><subparagraph id="H2A67CB1A06D64D7F88D822A156A592C6"><enum>(B)</enum><text>the value of the
United States dollar relative to other currencies; and</text>
</subparagraph><subparagraph id="H455C43AEFABE4B44AA0E73F202A97105"><enum>(C)</enum><text>the value of the
United States dollar relative to gold.</text>
</subparagraph></paragraph><paragraph id="HC3904BF3AF8C4505A81D41CAAB295908"><enum>(4)</enum><header>Public
disclosure; Report to the Congress</header><text display-inline="yes-display-inline">The Board and the Committee shall, with
respect to the definition of long-term price stability and the establishment of
metrics set pursuant to paragraph (1)—</text>
<subparagraph id="H3B1621055BDE4B63BFA4A8BF192D3501"><enum>(A)</enum><text display-inline="yes-display-inline">make such definition and metrics available
to the public on a website maintained by the Board or the Committee; and</text>
</subparagraph><subparagraph id="H9AA177E836454709986A9E95A2A07391"><enum>(B)</enum><text>each time such
definition and metrics are set or revised, issue a report to the Congress
stating such definition and
metrics.</text>
</subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="HCCBE037530DE44A6A2EFFA50DEF73CE3"><enum>(b)</enum><header>Additional
evaluations and determinations included in semi-Annual report to
Congress</header><text display-inline="yes-display-inline">Section 2B(b) of the
Federal Reserve Act is amended—</text>
<paragraph id="H74C2531D6E884C04A7AD09DDFE84DD9A"><enum>(1)</enum><text>by striking
<quote>containing a discussion</quote> and inserting the following:</text>
<quoted-block display-inline="no-display-inline" id="H0AD8D9DC8D8F4AC3B7539DF0B6E0F4F6" style="OLC">
<quoted-block-continuation-text quoted-block-continuation-text-level="section">containing—</quoted-block-continuation-text><paragraph id="H42008EC2F88B486BA2CD657F7294E433"><enum>(1)</enum><text display-inline="yes-display-inline">a
discussion</text>
</paragraph><after-quoted-block>;</after-quoted-block></quoted-block>
</paragraph><paragraph id="HCB096534992C4D5E93F19F50BCFC2BC5"><enum>(2)</enum><text>by striking the
period and inserting a semicolon; and</text>
</paragraph><paragraph id="HBA31F2943C3C44EA9676D8EE1FBCBE6F"><enum>(3)</enum><text>by adding at the
end the following:</text>
<quoted-block display-inline="no-display-inline" id="H14AD2FB983E246DDB1EA1E54BD728FC0" style="OLC">
<paragraph id="H36A2A45BA8B5443FBC5FB56AE216FC7E"><enum>(2)</enum><text display-inline="yes-display-inline">the results of the evaluation process
conducted pursuant to section 2A(b)(2)(B);</text>
</paragraph><paragraph id="H69D88A975B1D4D9C9113C2E923374625"><enum>(3)</enum><text>a determination of
whether the goal of long-term price stability is being met and, if such goal is
not being met, an explanation of why the goal is not being met and the steps
that the Board and the Federal Open Market Committee will take to ensure that
the goal is met in the future; and</text>
</paragraph><paragraph id="H3613967F3A8048188A678D38E60FCE26"><enum>(4)</enum><text>a description of
the main monetary policy instruments used by the Board and the Federal Open
Market Committee and a description of the strategy of the Board and the
Committee with respect to using such instruments to achieve the goal of
long-term price
stability.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection></section><enum>II</enum><header>Financial
Stability and Moral Hazard Mitigation Act</header>
<section commented="no" id="H28380E3DFB3C477492C6C2C9AC1AB99B"><enum>201.</enum><header>Findings</header><text display-inline="no-display-inline">The Congress finds the following:</text>
<paragraph commented="no" id="HACD46CA4DEAA43D482A817D047714D56"><enum>(1)</enum><text display-inline="yes-display-inline">The Federal Reserve performs an essential
function for financial stability by serving as lender of last resort in order
to—</text>
<subparagraph id="HE3C7513EECE4419B8D08816D38701D71"><enum>(A)</enum><text>prevent the
unnecessary failures of otherwise solvent United States banks and other
financial institutions;</text>
</subparagraph><subparagraph id="H3372C67CE05A45BF9AF2959CE61DB35C"><enum>(B)</enum><text>reduce the
likelihood of financial contagion and disruptions in United States financial
markets; and</text>
</subparagraph><subparagraph id="H8D3B892D7824400E9AF34C9A17D1473C"><enum>(C)</enum><text>minimize any
adverse effects on real output and employment in the United States
economy.</text>
</subparagraph></paragraph><paragraph id="H92FD1BCF868C4CB9AA6CA29AA003F925"><enum>(2)</enum><text>In acting as the
lender of last resort, the Federal Reserve, may—</text>
<subparagraph id="H0BCA02AC578C4E42843E371CB95DFAB0"><enum>(A)</enum><text>buy debt
securities at fair market value; or</text>
</subparagraph><subparagraph id="HDABC0C15369C4904B22308BCF7460B92"><enum>(B)</enum><text>provide short-term
credit, secured by appropriate collateral in proper margin, to otherwise
solvent banks and other financial institutions that encounter funding
difficulties during a financial crisis.</text>
</subparagraph></paragraph><paragraph id="H9DA2D55BB1424FF5B1DA00D1B8C32030"><enum>(3)</enum><text>Nevertheless, in
its nearly 100-year history, the Federal Reserve has never clearly articulated
its lender-of-last-resort policy.</text>
</paragraph><paragraph id="HF3BCBBD4E1B34831932F6DB4D936DFFA"><enum>(4)</enum><text>The absence of an
official lender-of-last-resort policy has led to—</text>
<subparagraph id="H810F42C63B054D0FA2849C4EBF6E50AD"><enum>(A)</enum><text>increased economic
uncertainty because no one knows with certainty how the Federal Reserve may
behave;</text>
</subparagraph><subparagraph id="H4521AA76973F4CC6B188BA6B4FD55C6D"><enum>(B)</enum><text>financially
distressed firms seeking political solutions in the form of pressure from
Congress or the Administration being placed on the Federal Reserve to act to
save them; and</text>
</subparagraph><subparagraph id="HEDE380774DB4408CB745B2DAB7BB7928"><enum>(C)</enum><text>a moral hazard
problem from financial institutions taking greater risks and increasing
leverage based upon assumptions of how the Federal Reserve will act, though
there is no formal statement assuring how the Federal Reserve will act.</text>
</subparagraph></paragraph><paragraph id="H3495607D664841B3889B55A8A0C9B28F"><enum>(5)</enum><text>By establishing a
formal lender-of-last-resort policy, the Federal Reserve would decrease
uncertainty in the market during times of financial crisis and mitigate the
moral hazards created by recent bailouts.</text>
</paragraph><paragraph id="HEB1739E8765643C1A2C96CB394637E55"><enum>(6)</enum><text>An official
lender-of-last-resort policy should provide that once a financial crisis has
dissipated, the Federal Reserve should, in an orderly way, sell any debt
securities that—</text>
<subparagraph id="H38116CFD72DB44CDB3E86CE7E29BF6FA"><enum>(A)</enum><text>the Federal
Reserve acquired acting as lender of last resort; and</text>
</subparagraph><subparagraph id="H8F07AAF77C2C493CACBE7E390B3530EE"><enum>(B)</enum><text>the Federal
Reserve does not normally own for its System Account.</text>
</subparagraph></paragraph><paragraph id="H3557F572A8D04ECD967947B733DBC88E"><enum>(7)</enum><text>Further, to reduce
moral hazard, the Federal Reserve’s lender-of-last-resort policy should make
clear that credit in any form will not be provided to insolvent banks or other
financial institution.</text>
</paragraph></section><section id="H8DE272BA259C402EAD3751ED42BFC7A8"><enum>202.</enum><header>Lender-of-last-resort
policy</header>
<subsection id="H24ED85F16FE74BBA8351303B990C297C"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">Not later than the
end of the 1-year period beginning on the date of the enactment of this Act,
the Board of Governors of the Federal Reserve System shall clearly articulate
the Board’s lender-of-last-resort policy.</text>
</subsection><subsection id="H753912931FE844589723678A4F7855E3"><enum>(b)</enum><header>Consultation</header><text display-inline="yes-display-inline">In articulating the policy required under
subsection (a), the Board of Governors shall consult with—</text>
<paragraph id="H107CF8508916467CB4E533CB0A6B6563"><enum>(1)</enum><text>the Federal
Reserve bank presidents;</text>
</paragraph><paragraph id="HBB6D7942ECBF4F21A3151DF7D038EB06"><enum>(2)</enum><text>the Comptroller of
the Currency;</text>
</paragraph><paragraph id="H86AFF2DD9DCE4DDC9D4FB8220306062D"><enum>(3)</enum><text>the Chairperson of
the Federal Deposit Insurance Corporation;</text>
</paragraph><paragraph id="H20C4B8521AB94E6CA4B965BBCD754D9D"><enum>(4)</enum><text>the Securities and
Exchange Commission;</text>
</paragraph><paragraph id="H1592684284CF4B3DA7475EAB7D7D23CD"><enum>(5)</enum><text>the Commodity
Futures Trading Commission; and</text>
</paragraph><paragraph id="HF2149AE2881E49F5A0A7613BC31B5381"><enum>(6)</enum><text>such other persons
with expertise in financial services regulation and monetary policy as the
Board of Governors may determine appropriate.</text>
</paragraph></subsection></section><enum>III</enum><header>Diversifying the
Federal Open Market Committee to Reflect a 21st Century Economy Act</header>
<section commented="no" id="H6AC5B53E967D4249A19666CC2D4AF782"><enum>301.</enum><header>Findings</header><text display-inline="no-display-inline">The Congress finds the following:</text>
<paragraph commented="no" id="HBACDBE303EC94AB7BD00656F5B8D0DE1"><enum>(1)</enum><text display-inline="yes-display-inline">The Federal Reserve Act delineates specific
requirements for the seven governors charged with oversight of the Federal
Reserve System.</text>
</paragraph><paragraph commented="no" id="H7F934A5D3E99459187B3E1A26800EAA0"><enum>(2)</enum><text>In a reflection of
the Federal Reserve System’s decentralized structure that broadly distributes
power and responsibility across the Nation, the Act mandates that the
presidentially appointed governors come from a wide range of geographic
locations and professional backgrounds. Specifically, the first undesignated
paragraph under section 10 of the Federal Reserve Act states that <quote>In
selecting the members of the Board, not more than one of whom shall be selected
from any one Federal Reserve District, the President shall have due regard to a
fair representation of the financial, agricultural, industrial, and commercial
interests and geographical divisions of the country.</quote>.</text>
</paragraph><paragraph commented="no" id="H5F51F9D3493E41E29B393C9E06964B18"><enum>(3)</enum><text>The Federal Open
Monetary Committee consists of members of the Board of Governors and the
President or Vice President of the Federal Reserve Bank of New York on a
permanent basis and rotates voting membership among the remaining Regional
Reserve Banks.</text>
</paragraph><paragraph commented="no" id="H9FD55DA092614EE89047E6A1A1D05783"><enum>(4)</enum><text>The existing
structure of the Federal Open Market Committee places too much authority in the
hands of Washington and New York at the expense of the remainder of the United
States.</text>
</paragraph><paragraph commented="no" id="H17662BBD429243EEB5D892A805EE392E"><enum>(5)</enum><text>Monetary policy
should be conducted in the interest of all Americans and that policy goal is
best achieved by a Federal Open Market Committee that provides greater
representation and voice in policy decisions to the entire Nation as
represented by the Regional Reserve Banks. This objective is best achieved by
reforming the voting membership of the Federal Open Market Committee to include
all Regional Reserve Banks on a permanent basis.</text>
</paragraph></section><section id="H49D408A637934C6CB706128B9D3D0B44"><enum>302.</enum><header>Federal Open
Market Committee membership</header><text display-inline="no-display-inline">Section 12A(a) of the Federal Reserve Act
(<external-xref legal-doc="usc" parsable-cite="usc/12/263">12 U.S.C. 263(a)</external-xref>) is amended—</text>
<paragraph id="H472B0B7D996C4F1BA2EE7FAC29D14900"><enum>(1)</enum><text>by striking
<quote>five representatives of the Federal Reserve banks to be selected as
hereinafter provided.</quote> and inserting <quote>1 representative from each
of the Federal Reserve banks.</quote>; and</text>
</paragraph><paragraph id="H2816A9FDB0284F90B4770E95358E7346"><enum>(2)</enum><text>by striking
<quote>and, beginning with the election for the term commencing March 1, 1943,
shall be elected annually as follows: One by the board of directors of the
Federal Reserve Bank of New York, one by the boards of directors of the Federal
Reserve Banks of Boston, Philadelphia, and Richmond, one by the boards of
directors of the Federal Reserve Banks of Cleveland and Chicago, one by the
boards of directors of the Federal Reserve Banks of Atlanta, Dallas, and St.
Louis, and one by the boards of directors of the Federal Reserve Banks of
Minneapolis, Kansas City, and San Francisco. In such elections each board of
directors shall have one vote; and the details of such elections may be
governed by regulations prescribed by the committee, which may be amended from
time to time.</quote> and inserting <quote>and shall be elected by the board of
directors of the Federal Reserve bank that they are to
represent.</quote>.</text>
</paragraph></section><enum>IV</enum><header>Demystification
of Monetary Policy Decisions Act</header>
<section commented="no" id="HB0965C8CCE5F479EBB4117006CC79751"><enum>401.</enum><header>Findings</header><text display-inline="no-display-inline">The Congress finds the following:</text>
<paragraph commented="no" id="HF57BD2E41D3C4532AA2B989E4A516C6B"><enum>(1)</enum><text display-inline="yes-display-inline">A more efficient release of transcripts
from the Federal Reserve would result in better guidance for market
participants, and hence more economically efficient decisionmaking.</text>
</paragraph><paragraph commented="no" id="H185BD0E811914C9E8BB29867A4F66B95"><enum>(2)</enum><text>According to
Federal Reserve Chairman Ben Bernanke, <quote>when the monetary policy
committee regularly provides information about objectives, economic outlook,
and policy plans, two benefits result: (1) markets will price assets more
efficiently, and (2) a closer alignment between market participants’
expectations about the course of future short-term interest rates and</quote>
the views of policymakers.</text>
</paragraph><paragraph commented="no" id="HF33660A7994D40E98FBFA9B4B69A8D05"><enum>(3)</enum><text>The Federal
Reserve is able to release transcripts more efficiently without compromising
their decisionmaking process.</text>
</paragraph></section><section id="H18D44BFF36DA4C948288DB02EF321D6A"><enum>402.</enum><header>Release of
transcripts</header><text display-inline="no-display-inline">Section 12A(a) of
the Federal Reserve Act (<external-xref legal-doc="usc" parsable-cite="usc/12/263">12 U.S.C. 263(a)</external-xref>) is amended by adding at the end the
following:</text>
<quoted-block display-inline="no-display-inline" id="H69F9BB6A2682457B8437927B1A787255" style="OLC">
<subsection id="H53DA2FAB71D0440E9937394989CE2220"><enum>(d)</enum><header>Release of
transcripts</header><text display-inline="yes-display-inline">The Committee
shall release meeting transcripts to the public not later than the end of the
3-year period following each
meeting.</text>
</subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</section><enum>V</enum><header>Exchange Rate
Responsibility Act</header>
<section id="HAB112B7C213A4D0C8E54E25CA1666802"><enum>501.</enum><header>Findings</header><text display-inline="no-display-inline">The Congress finds as follows:</text>
<paragraph id="H41864412DDE94D5695DDA40994E3A2D9"><enum>(1)</enum><text display-inline="yes-display-inline">The Board of Governors of the Federal
Reserve System and the Federal Open Market Committee exercise control over the
supply of U.S. dollars, which is a major factor affecting the foreign exchange
rate value of the United States dollar. Therefore, the Board of Governors and
Federal Open Market Committee should report to Congress on the impact of
monetary policy on the foreign exchange rate value of the United States
dollar.</text>
</paragraph><paragraph id="H8103382650C64FBF9BF0D4E406223160"><enum>(2)</enum><text>Over the last
several decades, Secretaries of the Treasury have repeatedly used the Exchange
Stabilization Fund for purposes that were not envisioned by Congress. To
prevent further abuses, the Exchange Stabilization Fund should be renamed as
the Special Drawing Rights Fund. The Special Drawing Rights Fund should hold
the Special Drawing Rights that the International Monetary Fund provided to the
United States. Any other assets currently in the Exchange Stabilization Fund
should be liquidated, and the proceeds used to reduce the public debt.</text>
</paragraph></section><section display-inline="no-display-inline" id="HD2597BFE99E4494BAFD9A109F0824896" section-type="subsequent-section"><enum>502.</enum><header>Report on the effect
of exchange rate policy</header><text display-inline="no-display-inline">Section 2B(b) of the Federal Reserve Act, as
amended by section 102(b), is further amended by adding at the end the
following:</text>
<quoted-block display-inline="no-display-inline" id="HD1E7DBB2E50C4B19B4D6B751AD121F12" style="OLC">
<paragraph id="H6DEACA142C724C319E43E82F9044158E"><enum>(5)</enum><text display-inline="yes-display-inline">an analysis of how the policies of the
Board and the Federal Open Market Committee are affecting the foreign exchange
rate value of the United States
dollar.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</section><section id="H1EDF96BC60D64F4ABCF72DE696510C4A"><enum>503.</enum><header>Renaming of
Exchange Stabilization Fund</header>
<subsection id="HDB1F0B6A76BD479388471C9B0FDDB0C5"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">Section 5302 of title
31, United States Code, is amended by striking <quote>stabilization
fund</quote> each place such term appears and inserting <quote>Special Drawing
Rights Fund</quote>.</text>
</subsection><subsection id="H301AA4058B7240419E256BB0A029B224"><enum>(b)</enum><header>Conforming
amendments</header>
<paragraph id="HB795F4CD922B4A0384F0E46A5A8449AA"><enum>(1)</enum><header>Balanced Budget
and Emergency Deficit Control Act of 1985</header><text display-inline="yes-display-inline">Section 255(g)(1)(A) of the Balanced Budget
and Emergency Deficit Control Act of 1985 (<external-xref legal-doc="usc" parsable-cite="usc/2/905">2 U.S.C. 905(g)(1)(A)</external-xref>) is amended by
striking <quote>Exchange Stabilization Fund</quote> and inserting
<quote>Special Drawing Rights Fund</quote>.</text>
</paragraph><paragraph id="H86F089CA7D234CB2A74638FAC7CB9B9E"><enum>(2)</enum><header>Emergency
Economic Stabilization Act of 2008</header><text display-inline="yes-display-inline">The Emergency Economic Stabilization Act of
2008 (<external-xref legal-doc="usc" parsable-cite="usc/12/5211">12 U.S.C. 5211 et seq.</external-xref>) is amended—</text>
<subparagraph id="HFC437FC7FD524EC18C12863387A8258A"><enum>(A)</enum><text>in section 131, by
striking <quote>Exchange Stabilization Fund</quote> each place such term
appears in headings and text and inserting <quote>Special Drawing Rights
Fund</quote>; and</text>
</subparagraph><subparagraph id="H77DA593F065F41C7848305B13D5D83EF"><enum>(B)</enum><text display-inline="yes-display-inline">in the item relating to section 131 in the
table of contents of such Act, by striking <quote>Exchange Stabilization
Fund</quote> and inserting <quote>Special Drawing Rights Fund</quote>.</text>
</subparagraph></paragraph><paragraph id="H9B5E84A44D004EC8883B0B7AE9136DFF"><enum>(3)</enum><header>International
Financial Institutions Act</header><text display-inline="yes-display-inline">Section 1704 of the International Financial
Institutions Act (<external-xref legal-doc="usc" parsable-cite="usc/22/262r-3">22 U.S.C. 262r–3</external-xref>) is amended by striking <quote>stabilization
fund</quote> each place such term appears and inserting <quote>Special Drawing
Rights Fund</quote>.</text>
</paragraph><paragraph id="H3B02E16F8FED4FA391B5ABF2B10F638C"><enum>(4)</enum><header>Special Drawing
Rights Act</header><text display-inline="yes-display-inline">The Special
Drawing Rights Act (<external-xref legal-doc="usc" parsable-cite="usc/22/286n">22 U.S.C. 286n et seq.</external-xref>) is amended by striking
<quote>Exchange Stabilization Fund</quote> each place such term appears and
inserting <quote>Special Drawing Rights Fund</quote>.</text>
</paragraph></subsection><subsection id="HB3C75DF950BA45FEB42AB4556EC37C99"><enum>(c)</enum><header>References</header><text>Any
reference in a law, regulation, document, paper, or other record of the United
States to the <quote>Exchange Stabilization Fund</quote> shall be deemed a
reference to the <quote>Special Drawing Rights Fund</quote>.</text>
</subsection></section><section id="HF429B083AAEC48538F5ADB67E35C8175"><enum>504.</enum><header>Conversion to
all-SDR Fund</header>
<subsection id="H78A547C4A38845C2871CE753E58ED231"><enum>(a)</enum><header>Funds used To
reduce the debt</header><text display-inline="yes-display-inline">The Secretary
of the Treasury shall liquidate all property in the Special Drawing Rights Fund
(as so renamed under section 503), other than Special Drawing Rights, and use
all such amounts to reduce the public debt.</text>
</subsection><subsection id="H947066060A034753AE40A8B5FA27A0C7"><enum>(b)</enum><header>Limitation on
Fund</header><text display-inline="yes-display-inline">Section 5302 of title
31, United States Code, is amended—</text>
<paragraph id="H586C5DAEAB364BAFA2D419D8C1B25E66"><enum>(1)</enum><text>in subsection
(a)(1)—</text>
<subparagraph id="H78B6CC470E4C4AC6A0586C3031D36801"><enum>(A)</enum><text>by striking
<quote>is available to carry out</quote> and inserting <quote>is only available
to carry out</quote>; and</text>
</subparagraph><subparagraph id="H3A139B7D54484029A78553781E7F05F9"><enum>(B)</enum><text>by striking
<quote>, and for investing in obligations of the United States Government those
amounts in the fund the Secretary of the Treasury, with the approval of the
President, decides are not required at the time to carry out this section.
Proceeds of sales and investments, earnings, and interest shall be paid into
the fund and are available to carry out this section. However, the fund is not
available to pay administrative expenses</quote>; and</text>
</subparagraph></paragraph><paragraph id="H5FBA20DB692F47818EE8AA33EB4E1E36"><enum>(2)</enum><text>by striking
subsection (b) and inserting the following:</text>
<quoted-block display-inline="no-display-inline" id="H746CB968F46E4223B03B8B74F81AFD24" style="OLC">
<subsection id="HF3FB0EA53C2F4B57A5AB43F7AFD01B69"><enum>(b)</enum><header>Fund only To
hold Special Drawing Rights</header><text display-inline="yes-display-inline">Notwithstanding any other provision of law,
only Special Drawing Rights may be deposited into the Special Drawing Rights
Fund.</text>
</subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="HF15E5C6FCA4A4618B32CBA4BF83DB857"><enum>(c)</enum><header>Conforming
amendments</header>
<paragraph id="H47E6DF9A57E8493EA9625877C8E98099"><enum>(1)</enum><header>Bretton Woods
Agreements Act</header><text display-inline="yes-display-inline">Section 18 of
the Bretton Woods Agreements Act (<external-xref legal-doc="usc" parsable-cite="usc/22/286e-3">22 U.S.C. 286e–3</external-xref>) is hereby repealed.</text>
</paragraph><paragraph id="H9E95C401FC2B41B49D58BFF5F1A5C983"><enum>(2)</enum><header>Support for East
European Democracy (SEED) Act of 1989</header><text display-inline="yes-display-inline">The Support for East European Democracy
(SEED) Act of 1989 (<external-xref legal-doc="usc" parsable-cite="usc/22/5401">22 U.S.C. 5401 et seq.</external-xref>) is amended—</text>
<subparagraph id="H1FA8EAC497344A4D946B84D2722EEEA2"><enum>(A)</enum><text>in section
101(b)(1), by striking <quote>such as—</quote> and all that follows through the
end of the paragraph and inserting <quote>such as the authority provided in
section 102(c) of this Act.</quote>; and</text>
</subparagraph><subparagraph id="HB23BD60B9BBF442B989D1E6E6F2AA111"><enum>(B)</enum><text>in section 102(a),
by striking <quote>section 101(b)—</quote> and all that follows through the end
of the subsection and inserting <quote>section 101(b), should work closely with
the European Community and international financial institutions to determine
the extent of emergency assistance required by Poland for the fourth quarter of
1989.</quote>.</text>
</subparagraph></paragraph></subsection><subsection id="H43C2CAE25A9944099AEAB0330CFAB3B3"><enum>(d)</enum><header>Treatment of
certain funds</header><text display-inline="yes-display-inline">Funds that
would otherwise have been deposited into the Special Drawing Rights Fund (as so
renamed under subsection (a)), but for the amendments made by this section,
shall instead be paid to the Secretary of the Treasury, and the Secretary of
the Treasury shall use such funds to reduce the public debt.</text>
</subsection><subsection id="HF3FF60D79758437B9675B477EAF73370"><enum>(e)</enum><header>Wind down period
for certain transactions</header><text>Notwithstanding any other provision of
this section, during the 3-year period beginning on the date of the enactment
of this Act, property other than Special Drawing Rights may be deposited, and
maintained, in the Special Drawing Rights Fund as needed to fulfill any
outstanding obligations on the Fund.</text>
</subsection></section><enum>VI</enum><header>Credit Allocation
Neutrality Act</header>
<section commented="no" id="H626E110E7E9D43B3A6006910F1B61477"><enum>601.</enum><header>Findings</header><text display-inline="no-display-inline">The Congress finds the following:</text>
<paragraph commented="no" id="H7E6A7D492F3F40A99A850F7068E69E70"><enum>(1)</enum><text display-inline="yes-display-inline">In conducting open market operations, the
Federal Open Market Committee should not allocate credit among households,
firms, and sectors of the United States economy.</text>
</paragraph><paragraph commented="no" id="HA556512288B242E1B0B5BDD9C2FD0F0C"><enum>(2)</enum><text>To assure the
credit allocation neutrality of open market operations among households, firms,
and sectors of the United States economy, the Federal Open Market Committee
should conduct open market operations in United States Government securities,
and repurchase and reverse repurchase agreements that have a term of 1 year or
less, except in unusual and exigent circumstances.</text>
</paragraph></section><section commented="no" id="H418CECC8A5954B5487AEBE99FA5A2B49"><enum>602.</enum><header>Limitation on
certain non-emergency security purchases</header>
<subsection commented="no" id="H6D620A8CEA604AD8A78762E575CDEDA0"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">The Federal Reserve
Act is amended—</text>
<paragraph commented="no" id="H32513830A84C487FA86BEC1269C8D4B0"><enum>(1)</enum><text>in section 12A, by
adding at the end the following:</text>
<quoted-block display-inline="no-display-inline" id="H6EAEB54C728D402BAB94E4FCC3A9C117" style="OLC">
<subsection commented="no" id="HB40DC54759424C17A6471AD6EED16EB2"><enum>(d)</enum><header>Emergency
purchasing authority</header>
<paragraph commented="no" id="HCDB1440C1B694FC5B1EE2A7E6A828714"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">In unusual and
exigent circumstances, the Committee, by the affirmative vote of at least
<fraction>2/3</fraction> of the members of the Committee, may authorize any
Federal reserve bank, during such period as the Committee may determine—</text>
<subparagraph commented="no" id="H1D97A62D9D14494A83C81B978C757CF7"><enum>(A)</enum><text>to buy and sell,
at home or abroad, bills, notes, revenue bonds, and warrants with a maturity
from date of purchase of not exceeding six months, issued in anticipation of
the collection of taxes or in anticipation of the receipt of assured revenues
by any State, county, district, political subdivision, or municipality in the
continental United States, including irrigation, drainage and reclamation
districts, and obligations of, or fully guaranteed as to principal and interest
by, a foreign government or agency thereof; and</text>
</subparagraph><subparagraph commented="no" id="H588EC168869846C3A6893BEC8E4B6B66"><enum>(B)</enum><text display-inline="yes-display-inline">to buy and sell in the open market, under
the direction and regulations of the Committee, any obligation which is a
direct obligation of, or fully guaranteed as to principal and interest by, any
agency of the United States.</text>
</subparagraph></paragraph><paragraph id="HE9D911EA0B8E4BE7A5B2147C9AAA1AA3"><enum>(2)</enum><header>Maximum holding
period</header><text display-inline="yes-display-inline">Any bond, bill, note,
revenue bond, warrant, or other obligation purchased by a Federal reserve bank
pursuant to paragraph (1) shall be disposed of before the end of the 5-year
period beginning on the end of the period determined by the Committee under
paragraph (1).</text>
</paragraph><paragraph commented="no" id="H1D1D9CCF0CF2453D87C706AF00F5E565"><enum>(3)</enum><header>Report</header><text>The
Committee shall provide to the Committee on Banking, Housing, and Urban Affairs
of the Senate and the Committee on Financial Services of the House of
Representatives, not later than 7 days after the Committee makes an
authorization under this subsection, a report that includes—</text>
<subparagraph commented="no" id="H58FAF0F6ECF34CEDA312589371F93FBA"><enum>(A)</enum><text>the justification
for the exercise of authority to provide;</text>
</subparagraph><subparagraph commented="no" id="H2C894EA6CF234EFA9D3FDD406E3D15A1"><enum>(B)</enum><text>the identity of
the person to or from which purchases or sales were made;</text>
</subparagraph><subparagraph commented="no" id="H05A281B814684BF7B02D7B32B1D1ABC3"><enum>(C)</enum><text>the date and
amount of the purchases or sales; and</text>
</subparagraph><subparagraph commented="no" id="H4844EFA9CF0B4A0FA9EE548B802E1955"><enum>(D)</enum><text>the material terms
of the purchases or sales.</text>
</subparagraph></paragraph></subsection><after-quoted-block>;
and</after-quoted-block></quoted-block>
</paragraph><paragraph commented="no" id="HC97F8B871C474C12B7DD406C8A398978"><enum>(2)</enum><text>in section
14(b)—</text>
<subparagraph commented="no" id="H1590C2CCC19D4849B0304BB4EF123B10"><enum>(A)</enum><text>in paragraph (1),
by striking <quote>bonds issued under the provisions of subsection (c) of
section 4 of the Home Owners' Loan Act of 1933, as amended, and having
maturities from date of purchase of not exceeding six months, and bills, notes,
revenue bonds, and warrants with a maturity from date of purchase of not
exceeding six months, issued in anticipation of the collection of taxes or in
anticipation of the receipt of assured revenues by any State, county, district,
political subdivision, or municipality in the continental United States,
including irrigation, drainage and reclamation districts, and obligations of,
or fully guaranteed as to principal and interest by, a foreign government or
agency thereof,</quote>; and</text>
</subparagraph><subparagraph commented="no" id="H21CC6D74C3C8413B8245A3094D9F3384"><enum>(B)</enum><text>by amending
paragraph (2) to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="H9CE33E59FB694C5BB91A19549E0C3ADF" style="OLC">
<paragraph commented="no" id="H9809BB87E21443D6ACFB6D5F2013E70C" indent="up1"><enum>(2)</enum><text display-inline="yes-display-inline">To enter into security repurchase
agreements and reverse repurchase agreements that have a term of 1 year or
less, in accordance with rules and regulations prescribed by the Board of
Governors of the Federal Reserve
System.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph></subsection><subsection commented="no" id="HE55FDE06960C4950B6BCC2EEC71BABF4"><enum>(b)</enum><header>Transition
provision</header><text>Each Federal reserve bank that holds bonds, bills,
notes, revenue bonds, warrants, or other obligations purchased under the
authority granted by a provision struck under subsection (a)(2) shall dispose
of such obligations not later than the end of the 5-year period beginning on
the date of the enactment of this Act.</text>
</subsection></section><enum>VII</enum><header>Bureau of
Consumer Financial Protection Funding Act</header>
<section id="H52846520AAE143EF8F0A747656EC3AA3"><enum>701.</enum><header>Findings</header><text display-inline="no-display-inline">The Congress finds the following:</text>
<paragraph id="HC382F13C38D4423890745B1F5199D51D"><enum>(1)</enum><text display-inline="yes-display-inline">As our Nation’s central bank, the Federal
Reserve conducts United States monetary policy and necessarily exercises broad
oversight responsibility to ensure the safety, soundness, and smooth
functioning of the Nation’s banking and payments systems.</text>
</paragraph><paragraph id="H0E24A53B11834FCDABC645EFD3CC9F51"><enum>(2)</enum><text>There exists a
broad consensus among policymakers, academics, and most informed commentators
that central bank independence is necessary to the proper and effective conduct
of monetary policy and those regulatory activities necessary for the
implementation of such monetary policy.</text>
</paragraph><paragraph id="HBE365E05ED0C4205A7BC55D039030D7E"><enum>(3)</enum><text>In order to
preserve the independence of its activities, the Federal Reserve should remain
operationally and financially autonomous within the United States
Government.</text>
</paragraph><paragraph id="HFCA0F88E23B746408E27D9DF3EA6E311"><enum>(4)</enum><text>However, those
activities that do not relate to the functions listed in paragraph (1) should
not occur outside of the constitutionally granted authority of Congress to
authorize and oversee the expenditure of public funds.</text>
</paragraph><paragraph id="H833EE4AF3D394E3EBDD06AE265ADED46"><enum>(5)</enum><text>Therefore, the
Bureau of Consumer Financial Protection should be subject to the Federal
appropriations process to ensure effective Congressional oversight over its
activities and use of public funds.</text>
</paragraph></section><section display-inline="no-display-inline" id="HEE59B4F1B56648D8A73F3B192971C146" section-type="subsequent-section"><enum>702.</enum><header>Bureau of Consumer
Financial Protection Funding</header>
<subsection id="H8CA938E9900043A4B1859176790C9BBE"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">Section 1017 of the
Consumer Financial Protection Act of 2010 is amended—</text>
<paragraph id="H5F89DA4607E94D9D95B18F44B26CD997"><enum>(1)</enum><text>in subsection
(a)—</text>
<subparagraph id="HF24E91900CD54C9A9FD7DC4476D32229"><enum>(A)</enum><text>by amending the
heading of such subsection to read as follows: <quote><header-in-text level="subsection" style="OLC">Budget, financial management, and
audit.—</header-in-text></quote>;</text>
</subparagraph><subparagraph id="H5BADFFD5B94F4EEAB7F4BE74CF1CD284"><enum>(B)</enum><text>by striking
paragraphs (1), (2), and (3);</text>
</subparagraph><subparagraph id="H380C4E49096F485AAF4F9AAF69949ADA"><enum>(C)</enum><text>by redesignating
paragraphs (4) and (5) as paragraphs (1) and (2), respectively; and</text>
</subparagraph><subparagraph id="HFE0C51892C0D4A31B9D09F8E8CCDE545"><enum>(D)</enum><text>in paragraph (1),
as so redesignated—</text>
<clause id="H13AB9D7124DC4D47B793C5341F2D01B6"><enum>(i)</enum><text>by
striking subparagraph (E); and</text>
</clause><clause id="HAB63CF1F51194581BDE2EF15BD8F1072"><enum>(ii)</enum><text>by
redesignating subparagraph (F) as subparagraph (E);</text>
</clause></subparagraph></paragraph><paragraph id="HEDC182E2787E455DB488D163873DD634"><enum>(2)</enum><text>by striking
subsections (b) and (c);</text>
</paragraph><paragraph id="H32F387386A754C799353EF861B028105"><enum>(3)</enum><text>by redesignating
subsections (d) and (e) as subsections (b) and (c), respectively; and</text>
</paragraph><paragraph id="H58C2C95DC32640EA8D7EC144ECA50C1A"><enum>(4)</enum><text>in subsection (c),
as so redesignated—</text>
<subparagraph id="H3CEA042B802A45729599A9F9BBF8C7B0"><enum>(A)</enum><text>by striking
paragraphs (1), (2), and (3) and inserting the following:</text>
<quoted-block display-inline="no-display-inline" id="H68C7F3198E384DB4B6DBC34254968938" style="OLC">
<paragraph id="H6932FDB5EB954907B3F0F2994972BD93"><enum>(1)</enum><header>Authorization of
appropriations</header><text display-inline="yes-display-inline">There is
authorized to be appropriated such funds as may be necessary to carry out this
title.</text>
</paragraph><after-quoted-block>;
and</after-quoted-block></quoted-block>
</subparagraph><subparagraph id="H80185D9410A1453E8A9DB06E33ABE1D6"><enum>(B)</enum><text>by redesignating
paragraph (4) as paragraph (2).</text>
</subparagraph></paragraph></subsection><subsection id="HCC02BA75BCB4440585C3C5CA597D57C8"><enum>(b)</enum><header>Effective
date</header><text>The amendments made by this section shall take effect on
October 1, 2013.</text>
</subsection></section>