[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 28 Introduced in House (IH)]

103d CONGRESS
  1st Session
                                 H. R. 28

 To promote accountability, diversity, and the public interest in the 
    operation of the Federal Reserve System, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            January 5, 1993

 Mr. Gonzalez introduced the following bill; which was referred to the 
            Committee on Banking, Finance and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
 To promote accountability, diversity, and the public interest in the 
    operation of the Federal Reserve System, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Federal Reserve System 
Accountability Act of 1993''.

SEC. 2. PUBLIC ACCOUNTABILITY OF PRESIDENTS AND BOARDS OF DIRECTORS OF 
              FEDERAL RESERVE BANKS.

    ``(a) In General.--Section 4 of the Federal Reserve Act (12 U.S.C. 
341, 301 et seq.) is amended to read as follows:

``SEC. 4. FEDERAL RESERVE BANKS.

    ``(a) General Corporate Powers.--Upon the filing of an organization 
certificate with the Comptroller of the Currency in accordance with 
this Act, a Federal reserve bank shall become a body corporate and as 
such, and in the name designated in such organization certificate, 
shall have the following powers:
            ``(1) Corporate seal.--To adopt and use a corporate seal.
            ``(2) Succession.--To have succession until dissolved by an 
        Act of Congress or until forfeiture of franchise for violation 
        of law.
            ``(3) Contract authority.--To make contracts.
            ``(4) Litigation authority.--To sue and be sued, complain 
        and defend, in any court of law or equity.
            ``(5) Appointment of officers other than the president.--To 
        appoint, by the board of directors, vice presidents and such 
        other officers and employees as are not otherwise provided for 
        in this Act, to define their duties, require bonds for them and 
        fix the penalty thereof, and to dismiss at pleasure such 
        officers or employees.
            ``(6) Adoption of by-laws and other administrative 
        authority.--To prescribe by the board of directors, by-laws not 
        inconsistent with law, regulating the manner in which its 
        general business may be conducted, and the privileges granted 
        to it by law may be exercised and enjoyed.
            ``(7) Incidental powers.--To exercise by the board of 
        directors, or duly authorized officers or agents, all powers 
        specifically granted by the provisions of this Act and such 
        incidental powers as shall be necessary to carry on the 
        business of banking within the limitations prescribed by this 
        Act.
            ``(8) Circulating notes.--Upon deposit with the Treasurer 
        of the United States of any bonds of the United States in the 
        manner provided by existing law relating to national banks, to 
        receive from the Comptroller of the Currency circulating notes 
        in blank, registered and countersigned as provided by law, 
        equal in amount to the par value of the bonds so deposited, 
        such notes to be issued under the same conditions and 
        provisions of law as relate to the issue of circulating notes 
        of national banks secured by bonds of the United States bearing 
        the circulating privilege, except that the issue of such notes 
        shall not be limited to the capital stock of such Federal 
        reserve bank.
    ``(b) President and First Vice President.--
            ``(1) Office of the president.--
                    ``(A) In general.--Each Federal reserve bank shall 
                have a president who shall be the chief executive 
                officer of the bank and all other executive officers 
                and all employees of the bank shall be directly 
                responsible to the president.
                    ``(B) Appointment.--The president of each Federal 
                reserve bank shall be appointed by the President of the 
                United States, by and with the consent of the Senate, 
                without discrimination on the basis of race, creed, 
                color, sex, or national origin.
                    ``(C) Diversified representation.--In appointing 
                the presidents of the Federal reserve banks, the 
                President shall include representatives of agriculture, 
                small business, labor, consumer and community 
                organizations, women, and minorities.
            ``(2) Office of the first vice president.--
                    ``(A) In general.--Each Federal reserve bank shall 
                have a first vice president who shall, in the absence 
                or disability of the president or during a vacancy in 
                the office of president, serve as chief executive 
                officer of the bank.
                    ``(B) Time limit on service as acting chief 
                executive officer.--The first vice president of a 
                Federal reserve bank may serve as the chief executive 
                officer of the bank under subparagraph (A) for not more 
                than 120 days.
            ``(3) Terms.--The president of any Federal reserve bank 
        shall be appointed for a term of 5 years.
            ``(4) Vacancies.--Whenever a vacancy shall occur in the 
        office of the president, the vacancy shall be filled in the 
        manner in which the original appointment was made and the 
        person so appointed shall hold office until the expiration of 
        the term to which such person's predecessor was appointed.
    ``(c) Board of Directors.--
            ``(1) In general.--Each Federal reserve bank shall be 
        conducted under the supervision and control of a board of 
        directors.
            ``(2)  Duties of directors.--
                    ``(A) In general.--The board of directors shall 
                perform the duties usually appertaining to the office 
                of directors of banking associations and all such 
                duties as are prescribed by law.
                    ``(B) Administration of affairs extension of 
                credit.--Each board of directors of a Federal reserve 
                bank--
                            ``(i) shall administer the affairs of the 
                        bank fairly and impartially and without 
                        discrimination in favor of or against any 
                        member bank; and
                            ``(ii) may, subject to the provisions of 
                        law and the orders of the Board of Governors of 
                        the Federal Reserve System, extend to each 
                        member bank such discounts, advancements, and 
                        accommodations as may be safely and reasonably 
                        made with due regard for the claims and demands 
                        of other member banks, the maintenance of sound 
                        credit conditions, and the accommodation of 
                        commerce, industry, and agriculture.
            ``(3) Regulation by board of governors of extension of 
        credit.--The Board of Governors of the Federal Reserve System 
        may prescribe regulations defining (within the limitations of 
        this Act) the conditions under which discounts, advancements, 
        and the accommodations may be extended by a Federal reserve 
        bank to member banks.
            ``(4) Regulation by board of directors of extension of 
        credit.--
                    ``(A) Collection and review of information.--Each 
                Federal reserve bank shall keep itself informed of the 
                general character and amount of the loans and 
                investments of its member banks with a view to 
                ascertaining whether undue use is being made of bank 
                credit for the speculative carrying of or trading in 
                securities, real estate, or commodities, or for any 
                other purpose inconsistent with the maintenance of 
                sound credit conditions.
                    ``(B) Consideration of information in making credit 
                decisions.--In determining whether to grant or refuse 
                any advance, rediscount, or other credit accommodation, 
                a Federal reserve bank shall give consideration to the 
                information maintained pursuant to subparagraph (A).
            ``(5) Report to board of governors of undue use of 
        credit.--The chairperson of the board of directors of each 
        Federal reserve bank shall report to the Board of Governors of 
        the Federal Reserve System any undue use of bank credit by any 
        member bank, together with the chairperson's recommendation.
            ``(6) Suspension of member bank from use of credit 
        facilities.--Whenever, in the judgment of the Board of 
        Governors of the Federal Reserve System, any member bank is 
        making such undue use of bank credit, the Board may, in the 
        Board's discretion and after reasonable notice and an 
        opportunity for a hearing, suspend such bank from the use of 
        the credit facilities of the Federal Reserve System and may 
        terminate or renew the suspension at any time.
    ``(d) Number and Classes of Directors and Related Requirements.--
            ``(1) In general.--The board of directors of each Federal 
        reserve bank shall consist of a total of 9 members divided into 
        2 classes, designated as classes A and B.
            ``(2) Class a directors.--Class A shall consist of 3 
        members elected in accordance with subsection (e) by the stock-
        holding banks without discrimination on the basis of race, 
        creed, color, sex, or national origin who shall be 
        representative of such banks.
            ``(3) Class b directors.--Class B shall consist of 6 
        members appointed in accordance with subsection (f) by the 
        Board without discrimination on the basis of race, creed, 
        color, sex, or national origin who shall represent the public 
        and be representative of the public.
            ``(4) Chairperson.--The Board shall designate 1 of the 
        class B members of any Federal reserve bank to serve as the 
        chairperson of the board of directors of such bank.
            ``(5) Ineligibility of members of congress.--No Senator or 
        Representative in Congress shall be a member of the Board of 
        Governors of the Federal Reserve System or an officer or a 
        director of a Federal reserve bank.
            ``(6) Terms of directors.--
                    ``(A) In general.--Each member of the board of 
                directors of a Federal reserve bank shall be elected or 
                appointed, as the case may be, for a term of 3 years.
                    ``(B) Interim appointments.--Any director elected 
                or appointed to fill a vacancy occurring before the 
                expiration of the term for which the director's 
                predecessor was elected or appointed shall be elected 
                or appointed only for the remainder of such term.
            ``(7) Vacancies.--Any vacancy on the board of directors of 
        any Federal reserve bank shall be filled in the manner in which 
        the original selection was made.
    ``(e) Nomination and Election of Class A Directors.--
            ``(1) Designation of voting blocs.--
                    ``(A) In general.--The Board of Governors of the 
                Federal Reserve System shall classify the member banks 
                of the district of each Federal reserve bank into 3 
                general groups, designating each group by number.
                    ``(B) Criteria.--In classifying member banks into 
                groups pursuant to subparagraph (A), the Board shall 
                take such action as may be reasonable to ensure that 
                each group consists as nearly as may be of banks of 
                similar capitalization.
            ``(2) Nomination process.--Subject to paragraphs (3) and 
        (4)--
                    ``(A) Bank nominations.--Each member bank shall be 
                permitted to nominate to the chairperson of the board 
                of directors of the Federal reserve bank of the 
                district 1 candidate for director of Class A.
                    ``(B) Preparation of lists of nominees.--The 
                candidates nominated by the member banks of each group 
                shall be listed by the chairperson of the board of 
                directors of the Federal reserve bank of the district, 
                indicating by whom nominated, and a copy of the list 
                for such group shall, within 15 days after the 
                completion of the list, be furnished by the chairperson 
                to each member bank of the group.
            ``(3) Election process.--Subject to paragraph (4)--
                    ``(A) Appointment of elector for each bank.--Each 
                member bank, by a resolution of the board or by an 
                amendment to the bank's by-laws, shall authorize the 
                bank's president, cashier, or some other officer to 
                cast the vote of the member bank in the elections of 
                class A directors.
                    ``(B) Preferential ballot.--Before the end of the 
                15-day period beginning on the date of the receipt of 
                the list of candidates in accordance with paragraph 
                (2)(B), the officer appointed by a member bank pursuant 
                to subparagraph (A) shall certify to the chairperson of 
                the board of directors of the Federal reserve bank of 
                the district the officer's 1st, 2d, and other choices 
                for class A director from such list upon a preferential 
                ballot upon a form furnished by the chairperson of the 
                board of directors of the Federal reserve bank of the 
                district by making a cross opposite the name of such 
                1st, 2d, and other choices but shall not vote more than 
                1 choice for any 1 candidate.
                    ``(C) Counting the ballots.--
                            ``(i) 1st column winner.--Any candidate 
                        having a majority of all votes cast in the 
                        column for 1st choice on the ballot for any 
                        group shall be declared elected.
                            ``(ii) Taking 2d column into account.--If 
                        no candidate has been declared elected by any 
                        group under clause (i), the candidate who has 
                        the highest number of votes after taking into 
                        account the total number of votes cast for each 
                        candidate in the columns for 1st and 2d choice 
                        on the ballot for such group by a majority of 
                        the electors voting in such group shall be 
                        declared elected.
                            ``(iii) Taking other choices into 
                        account.--If no candidate has been declared 
                        elected by any group under clause (i) or (ii), 
                        the candidate who has the highest number of 
                        votes after taking into account the total 
                        number of votes cast for each candidate in the 
                        columns for 1st, 2d, and other choices on the 
                        ballot for such group shall be declared 
                        elected.
            ``(4) Rules governing eligibility of directors and 
        electors.--
                    ``(A) Eligibility of directors on basis of group.--
                No individual who is a director or officer of a member 
                bank shall be eligible to serve as a Class A director 
                unless nominated and elected by banks which are members 
                of the same group as the member bank of which such 
                individual is an director or officer.
                    ``(B) Special rule in case of candidate serving 
                more than 1 bank.--If any individual is a director or 
                officer of more than 1 member bank, subparagraph (A) 
                shall be applied by taking into account only the member 
                bank (of which such individual is the director or 
                officer) which has the largest aggregate resources of 
                all of the banks of which such individual is a director 
                or officer.
                    ``(C) Electors for holding companies.--
                            ``(i) In general.--If 2 or more member 
                        banks in a Federal reserve district are 
                        subsidiaries of the same bank holding company 
                        (as defined in section 2 of the Bank Holding 
                        Company Act of 1956), only 1 member bank 
                        affiliate of such holding company shall be 
                        eligible to participate in the nomination or 
                        election of class A directors for such district 
                        under this subsection by such member banks.
                            ``(ii) Designation of eligible 
                        participant.--Any bank holding company which 
                        has 2 or more member bank subsidiaries in a 
                        Federal reserve district shall designate 1 such 
                        bank as the eligible bank for purposes of 
                        clause (i).
                            ``(iii) Rule applicable to bank which is a 
                        bank holding company.--A member bank which is a 
                        bank holding company (as defined in section 2 
                        of the Bank Holding Company Act of 1956) shall 
                        be treated as a subsidiary of a bank holding 
                        company for purposes of determining the number 
                        of member banks within a bank holding company 
                        which are eligible to participate in the 
                        nomination or election of class A directors and 
                        the designation of the bank pursuant to clauses 
                        (i) and (ii).
                    ``(D) Ineligibility of officers and employees of 
                banks controlled by a foreign government.--
                            ``(i) In general.--A director, officer, 
                        employee, or controlling shareholder of--
                                    ``(I) any foreign bank which is 
                                controlled by the government of a 
                                foreign country; or
                                    ``(II) any branch or agency of, or 
                                company controlled by, any such foreign 
                                bank,
                        shall not be eligible for appointment or 
                        election to the board of directors of any 
                        Federal reserve bank.
                            ``(ii) Prohibition on participation in 
                        nomination and election of class a directors.--
                        A foreign bank which is controlled by the 
                        government of a foreign country and a branch or 
                        agency of, or company controlled by, any such 
                        foreign bank may not participate in the 
                        nomination or election of class A directors.
                            ``(iii) Determination of control.--Any 
                        foreign government which, under section 2 of 
                        the Bank Holding Company Act of 1956, would be 
                        a bank holding company with respect to a 
                        foreign bank if--
                                    ``(I) such government were a 
                                company (as defined in such Act) which 
                                is subject to the Act; and
                                    ``(II) the foreign bank were a bank 
                                within the meaning of the Act,
                        shall be deemed to control the foreign bank for 
                        purposes of this section.
                            ``(iv) Applicability of section 2 of the 
                        bank holding company act.--Section 2 of the 
                        Bank Holding Company Act of 1956 shall apply 
                        to--
                                    ``(I) any determination by the 
                                Board, pursuant to clause (iii), of the 
                                applicability of this subparagraph to 
                                any foreign bank; and
                                    ``(II) the procedures for making 
                                and reviewing any such determination.
    ``(f) Provisions Relating to Class B Directors.--
            ``(1) Diversified representation.--In appointing class B 
        members of the board of directors of each Federal reserve bank, 
        the Board shall include representatives of agriculture, small 
        business, labor, consumer and community organizations, women, 
        and minorities.
            ``(2) Eligibility provision.--No individual may be 
        appointed as the director of a Federal reserve bank who--
                    ``(A) has resided in such bank's district for less 
                than 2 years; or
                    ``(B) has been a director, officer, employee, or 
                controlling shareholder of a depository institution (as 
                defined in section 19(b)(1)(A)) or any affiliate of a 
                depository institution at any time during the preceding 
                2-year period.
            ``(3) Ineligibility of class b directors for other 
        offices.--No class B director may be a director, officer, 
        employee, or shareholder of any depository institution (as 
        defined in section 19(b)(1)(A)) or depository institution 
        holding company (as defined in section 3(w)(1) of the Federal 
        Deposit Insurance Act).
    ``(g) Chairperson and Federal Reserve Agent; Deputy Chairperson.--
            ``(1) Chairperson and federal reserve agent.--The Board 
        shall designate 1 of the class B members as the chairperson of 
        the board of directors of a Federal reserve bank and as the 
        Federal reserve agent for the district of such bank.
            ``(2) Provisions relating to chairperson.--
                    ``(A) Reports to and representation of the board of 
                governors.--The chairperson of the board of directors 
                of a Federal reserve bank shall--
                            ``(i) make regular reports to the Board; 
                        and
                            ``(ii) shall act as the official 
                        representative of the Board for the performance 
                        of the functions conferred upon the Board by 
                        this Act.
                    ``(B) Compensation.--The chairperson of the board 
                of directors of a Federal reserve bank shall receive an 
                annual compensation to be fixed by the Board and paid 
                monthly by the Federal reserve bank.
            ``(3) Deputy chairperson.--The Board shall designate 1 of 
        the class B directors of the board of directors of each Federal 
        reserve bank as the deputy chairperson of such board of 
        directors who shall, in the absence or disability of the 
        chairperson or during a vacancy in the office of chairperson, 
        serve as chairperson of the board of directors.
            ``(4) Other acting chairperson.--In the absence or 
        disability of the chairperson and deputy chairperson of the 
        board of directors of a Federal district bank or during a 
        vacancy in the offices of chairperson and deputy chairperson, 
        the Board shall designate another class B director as the 
        acting chairperson of the board of directors.
    ``(h) Assistant Federal Reserve Agents.--
            ``(1) Appointment.--The Federal reserve agent shall appoint 
        1 or more assistant Federal reserve agents from among 
        individuals with tested banking experience.
            ``(2) Duties and powers of assistants.--Assistant Federal 
        reserve agents shall--
                    ``(A) assist the Federal reserve agent in the 
                performance of the duties of the office; and
                    ``(B) shall have power to act in the Federal 
                reserve agent's name and stead during the absence or 
                disability of such agent or a vacancy in the office of 
                the Federal reserve agent.
            ``(3) Bonds.--The Board of Governors of the Federal Reserve 
        System shall require such bonds of the assistant Federal 
        reserve agents as the Board may deem necessary for the 
        protection of the United States.
            ``(4) Compensation.--Assistant Federal reserve agents shall 
        receive an annual compensation, to be fixed and paid in the 
        same manner as that of the Federal reserve agent.
    ``(i) Compensation and Expenses of Directors, Officers, and 
Employees.--
            ``(1) Travel expenses.--Directors of Federal reserve banks 
        shall receive, in addition to any compensation otherwise 
        provided, a reasonable allowance for necessary expenses in 
        attending meetings of their respective boards, which amounts 
        shall be paid by the respective Federal reserve banks.
            ``(2) Compensation subject to review.--Any compensation 
        that may be provided by boards of directors of Federal reserve 
        banks for directors, officers, or employees shall be subject to 
        the approval of the Board of Governors of the Federal Reserve 
        System.
    ``(j) Publication of Results of Elections and Appointments of 
Directors.--Notice of the appointment or election of any member of the 
board of directors of any Federal reserve bank shall be published by 
the Board or the Federal reserve bank as soon as practicable after the 
appointment or election in newspapers of general circulation in the 
district of the bank.
    ``(k) Definitions.--For purposes of this section and section 
3(b)(3)--
            ``(1) Consumer and community organization.--The term 
        `consumer and community organization' means any organization 
        which has more than a 2-year history of representing consumer 
        or community interests in the provision of banking services, 
        services in connection with meeting credit needs, or housing 
        and financial consumer protections.
            ``(2) Minority.--The term `minority' has the meaning given 
        to such term in section 1204(c)(3) of the Financial 
        Institutions Reform, Recovery, and Enforcement Act of 1989.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect at the end of the 1-year period beginning on the date of 
the enactment of this Act, except that regulations necessary to carry 
out the effect of the amendment may be prescribed by the Board of 
Governors of the Federal Reserve System before the end of such period.
    (c) Staggered Appointments.--
            (1) Termination of terms of board of directors of federal 
        reserve banks.--Notwithstanding any provision of section 4 of 
        the Federal Reserve Act (as in effect on the day before the 
        date of the enactment of this Act), the term of office of any 
        member of the board of directors and any president of any 
        Federal reserve bank shall terminate at the end of the 1-year 
        period referred to in subsection (b).
            (2) Appointment of presidents of federal reserve banks.--Of 
        the presidents of the Federal reserve banks first appointed 
        after the end of the 1-year period referred to in subsection 
        (b)--
                    (A) 3 shall be appointed for a term of 5 years;
                    (B) 3 shall be appointed for a term of 4 years;
                    (C) 2 shall be appointed for a term of 3 years;
                    (D) 2 shall be appointed for a term of 2 years; and
                    (E) 2 shall be appointed for a term of 1 year,
        as designated by the President at the time of the appointment.
            (3) Election of class a members.--Of the class A members of 
        the boards of directors of each Federal reserve bank first 
        elected after the end of the 1-year period referred to in 
        subsection (b)--
                    (A) 1 shall be elected for a term of 3 years;
                    (B) 1 shall be elected for a term of 2 years; and
                    (C) 1 shall be elected for a term of 1 year,
        as designated by the Board of Governors of the Federal Reserve 
        System.
            (4) Appointment of class b members.--Of the class B members 
        of the boards of directors of each Federal reserve bank first 
        appointed after the end of the 1-year period referred to in 
        subsection (b)--
                    (A) 2 shall be appointed for a term of 3 years;
                    (B) 2 shall be appointed for a term of 2 years; and
                    (C) 2 shall be appointed for a term of 1 year,
        as designated by the Board of Governors of the Federal Reserve 
        System.

SEC. 3. INDEPENDENT AUDITS OF FEDERAL RESERVE BOARD AND FEDERAL RESERVE 
              BANKS REQUIRED.

    (a) In General.--The Federal Reserve Act is amended by inserting 
after section 11A (12 U.S.C. 248a) the following new section:

``SEC. 11B. INDEPENDENT AUDITS.

    ``The financial statement of the Board and each Federal reserve 
bank shall be audited annually in accordance with generally accepted 
auditing standards by an independent certified public accountant.''.
    (b) Repeal of Exceptions to GAO Audit Authority.--Section 714(b) of 
title 31, United States Code, is amended by striking ``Audits of the 
Federal Reserve Board and Federal reserve banks may not include--'' and 
all that follows through the period at the end.

SEC. 4. PROMPT PUBLIC DISCLOSURE OF OPEN MARKET COMMITTEE MEETINGS.

    Section 12A of the Federal Reserve Act (12 U.S.C. 263) is amended 
by adding at the end the following new subsection:
    ``(d) Prompt Public Disclosures of Meetings.--
            ``(1) Transcription and videotape of each meeting.--A 
        written copy of the minutes of each meeting of the Federal Open 
        Market Committee and a transcription and a videotape of the 
        discussion at each such meeting shall be made available to the 
        public before the end of the 60-day period beginning on the 
        date of the meeting and shall be treated as a Government 
        publication for purposes of making such material available to 
        depository libraries through the facilities of the 
        Superintendent of Documents in accordance with chapter 19 of 
        title 41, United States Code.
            ``(2) Prompt disclosure of policy actions.--An explicit, 
        written description of any determination, decision, directive, 
        or other conclusion made by the Federal Open Market Committee 
        at any meeting of the committee, including any directive or 
        instruction sent to any Federal reserve bank or Federal reserve 
        agent in connection with any open market operation shall be 
        made available to the public by the end of the 1-week period 
        beginning on the date of the meeting.
            ``(3) Meeting includes executive session.--For purposes of 
        this subsection, the term `meeting' includes any executive 
        session of the Federal Open Market Committee or any informal 
        meeting or other occasion at which a quorum of the members of 
        the committee are present.''.

SEC. 5. ELIGIBILITY REQUIREMENTS FOR BOARD OF DIRECTORS OF BRANCHES OF 
              FEDERAL RESERVE BANKS.

    Section 3 of the Federal Reserve Act (12 U.S.C. 521) is amended--
            (1) in the 1st paragraph--
                    (A) by striking ``Sec. 3. The Board of Governors of 
                the Federal Reserve System'' and inserting the 
                following:

``SEC. 3. FEDERAL RESERVE BANK BRANCH OFFICES.

    ``(a) Establishment of Branches.--The Board''; and
                    (B) by striking the 2d and 3d sentences;
            (2) in the 2d paragraph, by striking ``The Board of 
        Governors of the Federal Reserve System'' and inserting the 
        following:
    ``(c) Discontinuance of Branches.--The Board'';
            (3) in the 3d paragraph, by striking ``No Federal Reserve 
        Bank'' and inserting the following:
    ``(d) Construction of Branch Buildings.--No Federal reserve bank''; 
and
            (4) by inserting after subsection (a) (as so designated by 
        the amendment made by paragraph (1)(A) of this section) the 
        following new subsection:
    ``(b) Management of Branches.--
            ``(1) Board of directors.--Subject to such regulations as 
        the Board may prescribe, each branch of a Federal reserve bank 
        shall be under the supervision of a board of directors composed 
        of not fewer than 3 members and not more than 7 members 
        appointed as follows:
                    ``(A) A majority of 1 of the members appointed by 
                the Federal reserve bank.
                    ``(B) The remainder of the members appointed by the 
                Board.
            ``(2) Terms.--Members of the board of directors of a branch 
        of a Federal reserve bank shall hold office at the pleasure of 
        the Board.
            ``(3) Diversified representation.--In appointing members of 
        the board of directors of any branch of a Federal reserve bank, 
        the Board and the bank shall include representatives of 
        agriculture, small business, labor, consumer and community 
        organizations, women, and minorities.
            ``(4) Eligibility provision.--No individual may be 
        appointed by the Board as a member of the board of directors of 
        a branch of a Federal reserve bank who--
                    ``(A) has resided in such bank's district for less 
                than 2 years; or
                    ``(B) has been a director, officer, employee, or 
                controlling shareholder of a depository institution (as 
                defined in section 19(b)(1)(A)) or any affiliate of a 
                depository institution at any time during the preceding 
                2-year period.
            ``(5) Ineligibility of directors appointed by the board for 
        other offices.--No member of the board of directors of a branch 
        of a Federal reserve bank who was appointed to such position by 
        the Board may be a director, officer, employee, or shareholder 
        of any depository institution (as defined in section 
        19(b)(1)(A)) or depository institution holding company (as 
        defined in section 3(w)(1) of the Federal Deposit Insurance 
        Act).''.

SEC. 6. FEDERAL RESERVE DISTRICT ADVISORY COUNCILS.

    Section 4 of the Federal Reserve Act (as amended by section 2) is 
amended by adding after subsection (k) (as added by section 2 of this 
Act) the following new subsection:
    ``(l) Federal Reserve District Advisory Councils.--
            ``(1) Establishment.--Each Federal reserve bank shall 
        establish at least 1 advisory council consisting of 
        representatives of agriculture, small business, labor, consumer 
        and community organizations, women, and minorities to advise 
        the bank on issues relating to the bank.
            ``(2) Meetings.--Each council established under paragraph 
        (1) for any Federal reserve district shall meet at least once 
        during the 1st 6-month period and once during the 2d 6-month 
        period of each year.
            ``(3) Bank director attendance at advisory council 
        meetings.--At least 1 member of the board of directors of any 
        Federal reserve bank shall attend each meeting of each advisory 
        council established by such bank.
            ``(4) Recommendations of council.--Each advisory council 
        established by any Federal reserve bank shall promptly submit 
        to the bank any recommendation which the council determines is 
        appropriate.''.

SEC. 7. REPEAL OF EXEMPTION OF FEDERAL RESERVE BOARD AND FEDERAL 
              RESERVE BANKS FROM TITLE VII OF THE CIVIL RIGHTS ACT OF 
              1964.

    Section 701(b) of the Civil Rights Act of 1964 (42 U.S.C. 2000e(b)) 
is amended by adding at the end the following new sentence: ``The term 
`employer' includes the Board of Governors of the Federal Reserve 
System and each Federal reserve bank.''.

SEC. 8. FEDERAL RESERVE ACCOUNTABILITY COMMISSION.

    (a) Establishment.--There is hereby established the Federal Reserve 
Accountability Commission (hereafter in this Act referred to as the 
``Commission'').
    (b) Duties of the Commission.--The Commission shall conduct studies 
on the following issues:
            (1) Appropriateness of existing federal reserve 
        districts.--The appropriateness of the designation of Federal 
        reserve cities and the boundaries of the Federal reserve 
        districts as of the date of the enactment of this Act, taking 
        into account personal income in each of the districts and the 
        percentage of gross domestic product which is attributable to 
        each district, population distribution and other demographic 
        patterns and trends, the needs of the business community 
        (including small businesses) and consumers and other retail 
        users of financial services, and evolving methods and patterns 
        of communication.
            (2) Appropriateness of stock purchase requirements and 
        dividend payments.--The appropriateness of--
                    (A) the requirement that national banks and State 
                member banks purchase stock in Federal reserve banks; 
                and
                    (B) the rate of dividends paid by Federal reserve 
                banks to shareholders.
            (3) Valuation of and feasibility of transferring check 
        clearing services.--An assessment of the fair market value of 
        the check clearing system of the Board of Governors of the 
        Federal Reserve System and the feasibility of divesting a 
        portion of the check clearing system, taking into account the 
        economic benefits to be derived from, and efficiencies to be 
        achieved as a result of, the divestment.
            (4) Effect of fed operations on low- and moderate-income 
        families.--The extent to which the regulations of the Board of 
        Governors of the Federal Reserve System and the operations of 
        the Board and the Federal reserve banks have--
                    (A) reduced or otherwise affected the availability 
                of credit to low- and moderate-income families, 
                including residential mortgage loans;
                    (B) reduced or otherwise affected the availability 
                of financial services (other than credit) for low- and 
                moderate-income families and neighborhoods; and
                    (C) increased or otherwise affected the cost to 
                low- and moderate-income families for obtaining 
                financial services, including credit.
            (5) Appropriateness of abolishing swap fund.--The 
        appropriateness of prohibiting the Board of Governors of the 
        Federal Reserve System from engaging in reciprocal currency 
        exchanges (so called ``swap'' operations) or maintaining any 
        fund or account for such exchanges other than by direction of 
        the Secretary of the Treasury.
            (6) Appropriateness of salary and classification 
        structure.--The appropriateness of the salary and 
        classification structure for employees of the Board of 
        Governors of the Federal Reserve System and the Federal reserve 
        banks.
    (c) Membership.--
            (1) Number and appointment.--The Commission shall consist 
        of 9 members appointed as follows:
                    (A) 3 appointed by the President.
                    (B) 3 appointed by the Speaker of the House of 
                Representatives, 2 of whom shall be appointed from 
                among individuals proposed by the majority leader and 1 
                of whom shall be appointed from among individuals 
                proposed by the minority leader.
                    (C) 3 appointed by the President pro tempore of the 
                Senate, 2 of whom shall be appointed from among 
                individuals proposed by the majority leader and 1 of 
                whom shall be appointed from among individuals proposed 
                by the minority leader.
            (2) Political affiliation.--Not more than 2 members 
        appointed by the President may be of the same political party.
            (3) Terms.--Each member shall be appointed for the life of 
        the Commission.
            (4) Basic pay.--
                    (A) Rates of pay.--Members shall serve without pay.
                    (B) Travel expenses.--Each member shall receive 
                travel expenses, including per diem in lieu of 
                subsistence, in accordance with sections 5702 and 5703 
                of title 5, United States Code.
                    (C) Quorum.--5 members of the Commission shall 
                constitute a quorum but a lesser number may hold 
                hearings.
                    (D) Chairperson; vice chairperson.--The Chairperson 
                and Vice Chairperson of the Commission shall be 
                designated by the President from among the members 
                appointed by the President at the time of the 
                appointment.
                    (E) Meetings.--The Commission shall meet at the 
                call of the Chairperson or a majority of the members.
    (d)  Director and Staff of Commission; Experts and Consultants.--
            (1) Director.--The Commission shall have a Director who 
        shall be appointed by the Chairperson with the approval of the 
        Commission.
            (2) Staff.--With the approval of the Commission, the 
        Director may appoint and fix the pay of such personnel as the 
        Director considers appropriate.
            (3) Applicability of certain civil service laws.--The 
        Director and staff of the Commission may be appointed without 
        regard to the provisions of title 5, United States Code, 
        governing appointments in the competitive service, and may be 
        paid without regard to the provisions of chapter 51 and 
        subchapter III of chapter 53 of that title relating to 
        classification and General Schedule pay rates, except that an 
        individual so appointed may not receive pay in excess of the 
        annual rate of basic pay payable for level V of the Executive 
        Schedule.
            (4) Experts and consultants.--With the approval of the 
        Commission, the Director may procure temporary and intermittent 
        services under section 3109(b) of title 5, United States Code.
            (5) Staff of federal agencies.--Upon the request of the 
        Chairperson, the head of any Federal department or agency may 
        detail, on a reimbursable basis, any of the personnel of that 
        department or agency to the Commission to assist the Commission 
        in carrying out the Commission's duties under this Act.
    (e) Powers of Commission.--
            (1) Hearings and sessions.--The Commission may, for the 
        purpose of carrying out this section, hold hearings, sit and 
        act at times and places, take testimony, and receive evidence 
        as the Commission considers appropriate.
            (2) Powers of members and agents.--Any member or agent of 
        the Commission may, if authorized by the Commission, take any 
        action which the Commission is authorized to take by this 
        section.
            (3) Obtaining official data.--
                    (A) In general.--The Commission may secure directly 
                from the Board of Governors of the Federal Reserve 
                System and any other department or agency of the United 
                States information necessary to enable the Commission 
                to carry out this Act.
                    (B) Request.--Upon the request of the Chairperson 
                or Vice Chairperson of the Commission, the Board of 
                Governors of the Federal Reserve System and the head of 
                any other department or agency referred to in 
                subparagraph (A) shall furnish the requested 
                information to the Commission.
            (4) Mails.--The Commission may use the United States mails 
        in the same manner and under the same conditions as other 
        departments and agencies of the United States.
            (5) Administrative support services.--Upon the request of 
        the Commission, the Administrator of General Services shall 
        provide to the Commission, on a reimbursable basis, the 
        administrative support services necessary for the Commission to 
        carry out the Commission's responsibilities under this section.
    (f) Final Report.--
            (1) Required.--The Commission shall transmit a final report 
        to the President, the Board of Governors of the Federal Reserve 
        System, and the Congress before the end of the 18-month period 
        beginning on the date of the enactment of this Act.
            (2) Contents.--The final report shall contain a detailed 
        statement of the findings and conclusions of the Commission, 
        together with the Commission's recommendations for legislative 
        and administrative actions as the Commission considers 
        appropriate.
    (g) Termination.--
            (1) In general.--The Commission shall terminate not later 
        than 30 days after submitting the final report pursuant to 
        subsection (e).
            (2) Applicability of federal advisory committee act.--The 
        Federal Advisory Committee Act shall not apply to the 
        Commission.
    (h) Authorization of Appropriations.--
    There is authorized to be appropriated for fiscal years 1994 and 
1995 a total of $1,000,000 to carry out this section.

SEC. 9. RECESS APPOINTEES AND ACTING PRESIDENTS OF FEDERAL RESERVE 
              BANKS PROHIBITED FROM PARTICIPATING IN DECISIONS OF THE 
              FEDERAL OPEN MARKET COMMITTEE.

    (a) In General.--Section 12A of the Federal Reserve Act (12 U.S.C. 
263) is amended by adding after subsection (d) (as added by section 4 
of this Act) the following new subsection:
    ``(e) Voting Eligibility Requirement.--No individual may vote in 
any meeting of the Committee or otherwise participate in making any 
final determination of the Committee or approving any directive or 
instruction sent to any Federal reserve bank or Federal reserve agent 
in connection with any open market operation unless such individual 
votes or otherwise participates by virtue of a position held by such 
individual to which the individual has been appointed by the President, 
by and with the advice and consent of the Senate.''.
    (b) Technical and Conforming Amendments.--Section 12A(a) of the 
Federal Reserve Act (12 U.S.C. 263) is amended--
            (1) in the 1st sentence, by striking ``or first vice 
        presidents''; and
            (2) in the 3d sentence, by striking ``or first vice 
        president''.

SEC. 10. FEDERAL RESERVE BANKS TREATED AS AGENCIES FOR PURPOSES OF 
              FREEDOM OF INFORMATION ACT.

    Section 552(f) of title 5, United States Code, is amended by 
inserting ``Federal reserve bank,'' after ``Government controlled 
corporation,''.

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