In a 241-185 vote, the House passed a billThursday largely along party lines that would make major changes tothe way the Federal Reserve operates in an attempt to create moretransparency.

The Fed Oversight Reform and Modernization Act,spearheaded by Michigan Republican Rep. Bill Huizenga, would liftrestrictions placed on the Government Accountability Office,enabling the agency to audit thecentral bank and narrowing its ability to provideemergency bailouts.

The legislation would also require the Fed to use a formula likethe Taylor Rule, a tool usedto calculate whether nominal interest ratesshould be changed, when making rate decisions.

“If the Federal Reserve explained to the public how itmade its decisions, the American people would have greaterconfidence in them,” House Speaker Paul Ryan said in astatement after the vote. “Families could better plan for thefuture, invest their money wisely, and create opportunity for allof us.”

Critics of the bill claim giving the GAO more access wouldsubject the Fed to more public scrutiny, potentially leading todamaging effects on its ability to avert financial crises.

In a letter written to Houseleaders Tuesday, Fed Chair Janet Yellen said thelegislation would subject the central bank to harmful politicalinfluence and argued the annual audits conducted by an independentaccounting firm under the Inspector General is already an adequateform of oversight.

“This provision would politicize monetary policy and bringshort-term political pressures into the deliberations of the FOMCby putting into place real-time second guessing of policydecisions,” she wrote. “Such action would undermine theindependence of the Federal Reserve and likely lead to an increasein inflation fears and market interest rates, a diminished statusof the dollar in global financial markets, and reduced economic andfinancial stability.”

House Financial Services Committee Chairman Jeb Hensarling saidthe bill is necessary to rein in thecentral bank’s power and provide the necessary oversight andtransparency to restore its accountability.

“The Fed is even authorized to – on avague finding – break up a financial institutionthey deem poses a threat to financial stability,” the TexasRepublican said in a statement ahead of thevote. “In other words, the Fed can nowliterally occupy the board rooms of the largest financialinstitutions in America and influence how they deploycapital.”

The White House said it will veto the measure if it reaches thepresident’s desk.

For the bill to become law, Senate Republicans would have toattract Democratic supporters to override the president’sthreat.

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