Warren Presses Fed Governor Waller to Cease His Effort to Unilaterally Diminish Power of Regional Fed Banks in Service of President Trump

Warren Presses Fed Governor Waller to Cease His Effort to Unilaterally Diminish Power of Regional Fed Banks in Service of President Trump

"Your proposal, which would unilaterally concentrate additional authority at the Federal Reserve Board in Washington, D.C., appears to be inconsistent with the Federal Reserve Act."

"It is the purview of Congress, not a single Federal Reserve governor, to enact such significant Federal Reserve structural reforms."

Text of Letter (PDF)

Washington, D.C. - U.S. Senator Elizabeth Warren (D-Mass.), Ranking Member of the Senate Banking, Housing, and Urban Affairs Committee, sent a letter to Federal Reserve Governor Christopher Waller urging that he halt work on his proposal to "transform" the operational structure and governance of the Federal Reserve System's twelve regional Reserve Banks, which would unilaterally concentrate additional authority at the Federal Reserve Board in Washington, D.C.

"The Federal Reserve System is a powerful institution…In the Federal Reserve Act, Congress sought to disaggregate this power across a decentralized system of twelve quasi-private regional Reserve Banks overseen by a public Board of Governors in Washington," wrote the Ranking Member. "Despite these legal limitations, you outlined a proposal in two recent speeches in which you would 'transform' the operational structure and governance of the Federal Reserve System with respect to the regional Reserve Banks."

The Ranking Member laid out Governor Waller's troubling proposal: "Your proposal would require regional Reserve Banks to 'give up day-to-day control of many parts of their operations,' including information technology, human resources (HR), financial management, enterprise risk management, and payments. … To start, all of these functions would operate under the control of a single Fed leader, though you have not clarified how this leader would be selected or by whom, or where the leader would be stationed. After some period of time, these functions would then be physically consolidated in one of the existing twelve regional Reserve Banks that is selected to serve as the 'contractor' for that function."

The Ranking Member continued: "I am concerned that your proposal, rather than a serious effort to reform the Federal Reserve System, may be designed to win approval from President Trump… Thus far, the regional Reserve Bank presidents have refused to submit to Trump's wishes on monetary policy. Your efforts to diminish their power appear part of his plan to bring them to heel."

"All efforts to implement this framework must cease immediately. In addition, I request that you provide answers to the following questions and the requested documents by July 16, 2026," concluded the Ranking Member.

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