Senate lawmakers unanimously approved an amendment to the financial regulation bill, calling for the Government Accountability Office to investigate the emergency lending the Federal Reserve has done since the financial crisis.
Lawmakers approved 96-0 the amendment by Sen. Bernie Sanders (I-VT) to the bill, forcing the Fed to put details of its emergency lending on its website and requiring the GAO, Congress' investigative arm, to look into any potential conflicts of interest in those deals.
The Fed has become a target of public anger in the aftermath of Wall Street's near meltdown in the fall of 2008, taking blame for not seeing the coming collapse and for having what some perceive as too cozy a relationship with the nation's largest institutions.
That, coupled with its closely guarded lending, has created a bipartisan move to get the Fed to open up.
"The Fed can no longer operate in the kind of secrecy that it has operated in forever," Sanders said.
Sanders' initial audit proposal — similar to one approved by the House last year — drew stiff opposition from the Treasury and the Fed, both of which feared that a broader examination would interfere with the Treasury's authority to set interest rates and determine monetary policy.
Sanders agreed to narrow his proposal to a single audit carried out by the GAO and covering a period beginning in December 2007. The GAO was specifically directed to examine potential conflicts of interest between the Fed and the banks receiving assistance.
Louisiana Republican David Vitter failed to get support for his provision allowing the GAO to conduct regular audits and delve into the central bank's monetary policy.
"We must look forward and not just one time back to ... [assure] the American people that we all know what our Federal Reserve is doing and exactly why it's doing it," Vitter said.
The House approved a similar provision. The conflicting amendments would have to be reconciled upon passage of the Senate bill.
Material from The Associated Press was used in this report