Responding to the worst financial crisis since the Great Depression, the Senate on Thursday passed legislation to rein in some of the worst abuses by Wall Street. The legislation includes an historic provision by Sen. Bernie Sanders to audit the Federal Reserve. By a vote of 60-39, the Senate passed the legislation which the House had already approved, sending it to the president for his signature. Sanders called the overall legislation a “positive step forward” but that much more has to be done to end the greed and recklessness by the Wall Street financiers responsible for the worst economic collapse since the 1930s.
The senator faulted the legislation for not breaking up banks deemed “too big to fail.” Incredibly, three of the four biggest banks in the country are larger today than they were before taxpayers bailed them out. Sanders also wanted the bill to impose a cap on runaway credit card interest rates. Senators rejected an even more modest proposal to let states enforce their own usury laws.
The bill does, however, include Sanders’ provision to lift the veil of secrecy at the clandestine Federal Reserve.
The bill directs the Government Accountability Office to review all emergency actions by the central bank since the start of the financial crisis in 2007. The non-partisan research arm of Congress also will investigate apparent conflicts of interest involving the Fed and CEOs of the largest financial institutions in the country.
The measure also makes the central bank divulge the identities of banks and other financial institutions that took more than $2 trillion in nearly zero-interest loans or loan guarantees. Fed Chairman Ben Bernanke, who adamantly refused to tell Sanders and others the names of the banks which took the loans, now has until Dec. 1 to make the information public.
“Chairman Bernanke will finally have to understand that this money does not belong to the Federal Reserve, it belongs to the American people and the American people have a right to know where their hard earned taxpayer dollars are going,” Sanders said.
The Fed is fighting federal court judgments ordering the central bank to divulge the information that was sought in Freedom of Information Act lawsuits by Bloomberg News and other news organizations. The information that the Fed has withheld is separate from the $700 billion in Wall Street bailouts approved by Congress under the Troubled Asset Relief Program. Recipients of those funds were posted on the Treasury Department Web site.