This bill requires a full audit of the Board of Governors of the Federal Reserve System and the Federal Reserve Banks, to be completed within 12 months of enactment. The Comptroller General must then deliver a public report to Congress within 90 days, detailing findings, conclusions, and any recommendations for action.
It also repeals certain audit limitations and makes technical amendments to tighten and clarify what the GAO can audit, including programs and entities created by the Fed that fall outside current audit rules.
At a Glance
What It Does
The bill directs the GAO to finish a complete audit of the Fed Board and Reserve Banks within 12 months after enactment. Once the audit is complete, the GAO must provide a detailed report to Congress within 90 days, including findings and recommendations. It also rewrites key audit limitations to broaden or clarify what is subject to review.
Who It Affects
The Board of Governors, the twelve Federal Reserve Banks, and entities or programs established by or on behalf of the Fed (including any special purpose vehicles). It also directly engages Congress—Speaker, party leaders, and chairs and ranking members of relevant committees—with access to the audit findings.
Why It Matters
This creates a formal, independent check on the Fed’s operations and disclosures, increasing transparency for policymakers, markets, and the public. It also clarifies and potentially broadens the scope of what the GAO can review, affecting oversight dynamics and information flow.
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What This Bill Actually Does
The Federal Reserve Transparency Act of 2025 requires a full audit of the Federal Reserve System’s governing body and its regional banks to be completed within a year of enactment. The audit is to be conducted by the Comptroller General of the United States, with the results forming the basis for a public report to Congress.
The report must be delivered within 90 days after the audit’s completion and shared with leadership and committee members who have jurisdiction over monetary policy and federal budgeting.
The Five Things You Need to Know
The audit targets the Board of Governors and the Federal Reserve Banks and must be completed within 12 months of enactment.
The Comptroller General must deliver a comprehensive report to Congress within 90 days of audit completion, including findings and recommended actions.
The bill repeals the second sentence of subsection (b) of 31 U.S.C. 714, removing at least one audit limitation.
Definitions are amended to include Fed programs, facilities, and SPVs as they relate to audit coverage, clarifying what is and isn’t subject to GAO review.
Technical amendments align the audit framework with the Federal Reserve Act, expanding cross-references to ensure broader accountability.
Section-by-Section Breakdown
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Short title
This section designates the act as the Federal Reserve Transparency Act of 2025, establishing its formal citation and scope. The provision signals the Legislature’s intent to subject the Fed’s operations to independent review and public reporting.
Audit mandate
Notwithstanding existing audit restrictions, the Comptroller General shall complete a full audit of the Board of Governors of the Federal Reserve System and the Federal Reserve Banks under the authority cited in 31 U.S.C. 714(b). The audit must be finished within 12 months from enactment, ensuring a timely, independent examination of Fed operations.
Audit reporting
Within 90 days after the audit’s completion, the Comptroller General must submit a report to Congress detailing findings and conclusions, and include recommendations for legislative or administrative actions. The report must be made available to congressional leadership and committees with jurisdiction, ensuring broad access for accountability and review.
Repeal of limitations
Subsection (b) of section 714 of title 31, United States Code, is amended by repealing the second sentence. This broadens the potential reach of the GAO audit, reducing earlier statutory constraints that limited the scope of what could be audited.
Technical amendments
The section makes conforming changes to 31 U.S.C. 714 and the Federal Reserve Act, including redefining terms related to audits of Fed programs and facilities (such as SPVs) not subject to traditional audit under 714. It also adjusts cross-references to Section 13(3) and related provisions to reflect the broader audit framework and to ensure consistency across the governance and reporting regime.
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Explore Finance in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Comptroller General of the United States (GAO) gains a formal, expanded mandate to audit the Federal Reserve System and its banks, increasing its oversight role.
- Congressional leadership and key committees (e.g., House and Senate banking and appropriations panels) gain structured access to an independent audit and findings for oversight.
- Taxpayers and the general public benefit from enhanced transparency into Fed operations, programs, and potential risks revealed by the GAO.
- Policy researchers and financial market participants gain clearer information about Fed programs and practices, supporting more informed analysis.
- Regulatory and oversight communities obtain a more complete dataset for assessing monetary policy processes and financial stability considerations.
Who Bears the Cost
- Federal Reserve Board of Governors and Federal Reserve Banks must source data and cooperate with the GAO audit, creating potential administrative and data-management costs.
- GAO staff and related government resources will need to scale to perform and oversee the expanded audit workload.
- Congress and its committees may incur higher oversight and administrative costs to review, interpret, and act on audit findings.
- Some information disclosures could raise confidentiality or security considerations, requiring careful handling and potential constraints on sensitive data.
- Any new reporting and compliance requirements may introduce ongoing administrative burdens for Fed-operated programs and facilities.
Key Issues
The Core Tension
The central dilemma is whether broad, independent GAO oversight of Fed programs and SPVs enhances accountability without compromising the Fed’s ability to conduct monetary policy confidentially and with sufficient data security.
The bill’s push for a comprehensive GAO audit of the Fed raises tensions between transparency and the Fed’s policy independence. Broadening the audit to include SPVs and Fed programs not previously subject to review could uncover sensitive operational details or information that market participants would rely on for decision-making.
While the act envisions broad access and public reporting, practical questions remain about protecting confidential supervisory information and how the GAO will handle data classified or sensitive in nature. The changes to audit law also raise questions about the interaction between monetary policy discretion and legislative oversight, and how the information will be balanced against the Fed’s statutory confidentiality protections.
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