New Law Demands the Fed Detail Every Dollar Spent, From Research to Rulemaking, Starting in Two Years

The newly proposed Federal Reserve Financial Accountability and Transparency Act is essentially making the Federal Reserve Board of Governors show its work—and its receipts—in a big way. This legislation mandates a significant overhaul of the Fed's annual report, requiring unprecedented detail about how the central bank spends money and allocates staff across its vast network of Federal Reserve banks.

The Fed’s New Homework Assignment

Starting two years after this bill becomes law, the Fed can't just publish high-level summaries anymore. The Board must break down its annual spending and the number of full-time employees (FTEs) for every single Federal Reserve bank into specific, granular categories. Think of it like itemizing every line on a corporate budget. This includes separating costs for things like supervising financial institutions (a big one for banks), legal work, general operations (like handling cash and payment systems), and economic research (the stuff that shapes interest rate decisions). They even have to track costs for administrative tasks and interactions with international groups like the Basel Committee.

Where the Money Goes: Research and Regulation

Beyond just operational expenses, the bill zeroes in on two areas that regularly draw scrutiny: research and rulemaking. The Fed will be required to list the top three most expensive research areas—both in terms of dollars spent and staff time—for the Board itself and for each regional Reserve bank. This means we’ll know exactly how much the Fed is investing in climate change modeling versus, say, labor market studies. Even more critically, the report must detail the total amount of money spent in the previous year on every single rule, guidance document, or policy statement that the Fed proposed or finalized. If a new regulation costs $5 million to develop and implement, the public will know.

What This Means for Real People

For the average person, this isn't a direct change to interest rates or your mortgage application. This is about transparency and oversight. The Fed is a powerful, often opaque institution, and this bill forces it to open the books wider. If you’re a business owner or an analyst, this detailed breakdown gives you a clearer picture of where the Fed is focusing its massive resources. Is the majority of their budget going toward ensuring banks are stable (supervision) or towards developing complex new rules (rulemaking)? This level of detail empowers Congress and the public to conduct better oversight and ask pointed questions about the cost-effectiveness of the Fed’s priorities. The only group feeling the immediate pain will be the Fed’s administrative staff, who will have a massive new accounting and reporting burden to meet these detailed requirements.