Senate passes bill requiring Federal Reserve to have board member with community-bank experience

The five-member Federal Reserve Board could soon be required to have at least one member with community banking experience. The Senate approved an amendment introduced by Sen. David Vitter (R.-La.), who "said it would help introduce balance to a Federal Reserve that has come to lean too heavily on officials with academic and 'megabank' experience." Vitter said, “There’s an unmistakable trend away from having adequate representation from folks with community bank experience." The amendment was to the Terrorist Risk Insurance Act, which passed and went to the House.

Federal Reserve Chair Janet Yellen said she would welcome a community banker on the board but opposed  legislation to require one, reports Pedro Nicolaci De Costa of The Wall Street Journal. Yellen said, “The board has many different needs. I think if we were to sit down and make a list of all of the kinds of expertise that are needed and are useful, there would be more than seven items on that list. And I would, you know, prefer to see appointments made in light of the priorities, including for a community banker, rather than for the indefinite future locking in and earmarking particular seats for particular purposes.” (Read more)