The powers of the Federal Reserve are expansive and have a dramatic effect on the population of the United States. What few people fail to understand is that the Federal Reserve is a private institution. Despite having the word “federal” in their name they are not part of the government.
The Federal Reserve has been given the power to write regulations mandating that financial institutions meet the requirements of the Equal Credit Opportunity Act, the Community Reinvestment Act, the Fair Credit Billing Act and many other consumer protection or anti-discrimination acts passed by the Congress in the 1960s, 1970s, and 1980s.
In the Depository Institutions Deregulation and Monetary Control Act of 1980 otherwise known as the DIDMCA, the Fed was given the power to assess reserve requirements on the transaction deposits of non-bank depository institutions and to allow all such institutions to borrow from its discount window. Besides its domestic responsibilities, the Fed conducts US interventions in foreign currency markets and is the primary regulator of foreign banks operating in the United States in US banks operating overseas.
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Over time than the Fed’s powers have increased greatly. The Fed has gained power over banks, bank holding companies, non-bank depository institutions, consumer lending, securities market for participants, foreign banking institutions operating in the United States and many other entities. Furthermore, through its monetary policy, it is fair to say that it can affect every borrower and lender and all the people who use the US dollar to conduct transactions in the United States and elsewhere.
Many US politicians see this much power concentrated in a private institution as un-American and a grave danger to the US population on a whole. At many times the Federal Reserve’s decisions call into question as to who they really serve, our best interests or financial interests. Maybe an audit of the Federal Reserve can answer that question.
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