Democratic Congress Members Call for Review of FRBNY

Three Democratic members of the U.S. Congress have signed a letter urging the federal government to investigate the Federal Reserve Bank of New York (FRBNY) and its monitoring of big banks.

Representatives Maxine Waters (California), Al Green (Texas), and Keith Ellison (Minnesota) have joined Senator Elizabeth Warren (D-Massachusetts) in calling for hearings to investigate the Federal Reserve Bank of New York following a story that appeared in ProPublica regarding Carmen Segarra, a former Fed investigator who was frustrated by her bosses' lack of action against Goldman Sachs after she made public secret audio recordings she made of her supervisors.

The letter from the Congress members addressed two Republican representatives, Jeb Hensarling of Texas and Patrick McHenry of North Carolina, who are both senior members of the House Financial Services Committee. Hensarling has the authority to call hearings, as the committee chairman, but so far has not done so.

"The article ... suggests that additional scrutiny is needed to ensure that management practices and workplace culture at the FRBNY do not serve to undermine the effectiveness and integrity of the FRBNY's supervision of the financial institutions under its purview," the Democratic Congress members wrote.

The Congress members also noted that Hensarling has been critical of the Consumer Financial Protection Bureau (CFPB)'s regulatory actions and the committee's dedication of resources in reviewing the Bureau's practices. The Representatives wrote that they hope House Financial Services Committee will give the same attention and resources to investigate FRBNY as it the has given to reviewing the practices of CFPB.