Federal Reserve Loss Transparency: New Funding Rules for Consumer Protection.
This law links the funding of the consumer protection agency (CFPB) directly to the financial performance of the Federal Reserve Banks. If the Fed incurs operating losses, transfers to the CFPB are halted until those losses are offset, potentially affecting the agency's ability to enforce financial regulations. Furthermore, the act mandates that the Federal Reserve must use standard accounting principles (GAAP) to calculate its earnings, enhancing financial transparency.
Key points
Funding for the consumer protection agency (CFPB) is restricted if Federal Reserve Banks incur aggregate operating losses.
The Federal Reserve must use Generally Accepted Accounting Principles (GAAP) to calculate its net earnings and total capital, ensuring greater transparency.
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