HR 24119th CongressIn Committee

Federal Reserve Transparency Act of 2025

Introduced: Jan 3, 2025

Sponsor: Rep. Massie, Thomas [R-KY-4] (R-Kentucky)

Standard Summary

Comprehensive overview in 1-2 paragraphs

The Federal Reserve Transparency Act of 2025 would compel a full, independent audit of the Federal Reserve System—the Board of Governors and the twelve Federal Reserve Banks—by the Comptroller General of the United States (GAO). The audit must be completed within 12 months of enactment, and the GAO would be required to deliver a detailed report to Congress within 90 days after the audit, including findings, conclusions, and any legislative or administrative recommendations. The bill also repeals certain limits that currently constrain GAO’s ability to audit the Fed and makes conforming amendments to broaden what is subject to audit, including programs or facilities (such as SPVs or other entities created by the Fed under section 13(3)). In short, it aims to significantlyexpand GAO oversight and transparency of the Fed’s operations and related entities.

Key Points

1Full GAO audit requirement: The Comptroller General must complete an audit of the Board of Governors and the Federal Reserve Banks within 12 months after enactment, despite any existing law to the contrary.
2Report to Congress: Within 90 days after the audit, the GAO must provide a report detailing findings and conclusions and make it available to congressional leaders and any Member of Congress who requests it.
3Repeal of audit limitations: The bill repeals the second sentence of subsection (b) of 31 U.S.C. 714, removing certain statutory constraints on GAO audits of the Fed.
4Technical and conforming amendments: The act makes several edits to 31 U.S.C. 714 (removing references to subsections that are no longer applicable) and adjusts Fed-related provisions in the Federal Reserve Act to align with the expanded audit authority.
5Scope expansion to Fed off-balance-sheet entities: The amendments define “a program or facility” (including any SPV or other entity created by or on behalf of the Fed) under section 13(3) as not subject to audit under 714(e) unless the bill’s changes bring it into scope, effectively broadening or clarifying what can be audited. It also removes references to certain prior audit-related restrictions and related Congressional reporting constraints.

Impact Areas

Primary group/area affected- The Federal Reserve System: Board of Governors and the twelve Federal Reserve Banks would undergo a full GAO audit, with potential implications for how their operations and off-balance-sheet facilities are reported and scrutinized.- The Comptroller General/GAO: Would gain a statutory mandate and timeline to conduct a comprehensive audit of the Fed and its related facilities, with a formal reporting requirement to Congress.- Congress and congressional oversight: Increased access to audit findings and formal GAO recommendations could drive legislative or administrative actions related to the Fed.Secondary group/area affected- Financial markets and monetary policy discussion: Heightened transparency about the Fed’s operations, balance sheet, and facilities could influence public and market perceptions of monetary policy and financial stability tools.- Federal Reserve operational disclosures: Expanded audit scope may lead to broader disclosure of Fed programs, facilities, and vehicles (e.g., SPVs), potentially affecting governance and accountability practices.Additional impacts- Administrative and cost considerations: Conducting a full GAO audit of the Fed and related entities within a year could require substantial GAO resources and coordination, with potential budgetary implications.- Balance between transparency and independence: The legislation emphasizes transparency but could raise considerations about the Fed’s operational independence and the appropriateness of public access to certain sensitive data.

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