Should Congress require the Federal Reserve Board to report on racial and ethnic disparities?

This bill has Passed the House of Representatives
Bill Summary

The Federal Reserve and Racial Economic Equity Act would require the Federal Reserve Board to report to Congress on racial and ethnic disparities in employment, income, wealth, and access to affordable credit. In addition to reporting trends and demographic information, the Board would also have to report its strategies to eliminate any disparities. Sponsor: Representative Maxine Walters (Democrat, California, District 43) View full bill text ➔

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Opponents say

•   "A year and a half ago, Democrats introduced legislation that would assign the Fed the mission of racial redistribution. They want to hard-wire a kind of financial affirmative action into our banking system. The American people don’t want these wild ideas. So their elected representatives don’t support them. Now the far left wants to transplant these radical campaigns out of Congress and into our central bank where American voters don’t get a say. This is just another example of today’s Democratic Party refusing to work within our basic rules and institutions and instead trying to steamroll the guardrails to get their way."

Source: Senator Mitch McConnell (Republican, Kentucky)

•  "Instead of trying to divert Americans’ attention from Democrats’ dismal record on the economy, we should be here discussing the real solutions to many economic problems they created."

Source: Representative Ann Wagner (Republican, Missouri, 2nd District)

Proponents say

•   "The job of the Federal Reserve is to oversee our nation's economy. In that role, the Fed has a responsibility to ensure the voices of communities are heard and to play a role in addressing racial and economic inequality. Over the past year, Fed officials themselves have recognized they have a role in addressing the racial inequality that has plagued our economy for far too long. This extends beyond the Fed's monetary policy to things like their oversight of the payments system and their review of bank mergers. This bill requires that the Fed provide labor force trends and plans to ensure racial and economic justice is included in decision making. Long before the pandemic hit people of color the hardest, my colleagues and I had called on the Federal Reserve to fix systemic barriers for candidates of color within its labor force. The current crisis has only further highlighted the fact that we need all hands on deck, including the Federal Reserve, to take action to address racial equity." 

Source: Representative Maxine Walters (Democrat, California, District 43)

•  "Not only did the pandemic reveal the substantial racial gaps in our economy, but its disproportionate harmful impact on communities of color deepened the divide, especially in our financial system. As we rebuild our economy, the government has a responsibility to address racial disparities in wages, economic opportunity, and wealth. Now is the time to act and to give the Federal Reserve the explicit mission of combating institutional racism in our economy." Source: Senator Kristen Gillibrand (Democrat, New York)

"The Fed can use its existing authorities to help reverse the serious racial gaps in our economy, including in our current recovery from the COVID-19 crisis - and our bill will require the Fed to do so. Systemic racism and inequality is not something that happens on its own -- it is a result of specific policy choices and the Fed must take deliberate action to fix it."

Source: Senator Elizabeth Warren (Democrat, Massachusetts)