WASHINGTON (MarketWatch) — A House panel led by longtime Federal Reserve critic Rep. Ron Paul will take direct aim at the central bank next week when it considers a bill to abolish the powerful institution.

The legislation will be among a handful of bills that will be looked at on Tuesday by the congressional committee that could all spell significant change to — if not outright elimination of — the Federal Reserve.

“More and more people are beginning to understand just how destructive the Federal Reserve’s monetary policy has been,” said Paul, a Texas Republican and chairman of the House Financial Services subcommittee on Domestic Monetary Policy and Technology, which has oversight authority over the Fed.

Paul, a Republican presidential hopeful this year, has consistently made abolishment or reform of the Fed a central plank in his sinking election platform, and introduced the bill to abolish the central bank that the panel will be discussing.

The Texas Republican has run for president three times, first as a Libertarian in 1988, then as a Republican in 2008 and 2012.

Rep. Ron Paul (R., Texas), during a February hearing called to hear testimony from Federal Reserve chief Ben Bernanke about monetary policy. Reuters

The Fed, created in 1913 in response to a series of bank panics, sets monetary policy and supervises financial institutions.

Paul is convening his panel to consider his bill, the Federal Reserve Board Abolition Act and other bills seeking to make changes to the central bank. These include measures introduced by Rep. Barney Frank, a Massachusetts Democrat and the outgoing ranking member of the House Financial Services Committee, Reps. Marcy Kaptur, Democrat of Ohio, and Rep. Mike Pence, Republican of Indiana.

Frank’s bill would remove the five members of the Fed’s Federal Open Market Committee that are not subject to a Senate confirmation process and replace them with four members that would be subject to the congressional process.

The FOMC is the unit within the Federal Reserve that oversees monetary policy by setting targets for interest rates.

According to Frank, these five officials are instead chosen by regional Federal Reserve Bank directors and “effectively are appointed by large commercial banks in each region.”

The Massachusetts Democrat argues that this results in the Fed chairman presiding over a structure where he has to confront individuals with “business interests” that don't share the central bank’s commitment to combat inflation and promote employment.

Paul scored a big victory when legislation he sponsored to audit the Fed was included in the Dodd-Frank Act, the sweeping financial reform legislation approved in 2010 in response to the financial meltdown of 2008. The subsequent audit, conducted by the Government Accountability Office, found that many employees and contractors of the New York Fed were allowed to keep investments in companies that received Fed assistance. Read about how the audit of the Fed found conflict of interest weaknesses

Criticism of the Fed first peaked in 2009, when lawmakers expressed outrage that the Fed didn’t initially disclose that its taxpayer-funded, $190-billion bailout package to keep troubled American International Group Inc. AIG, -1.23% afloat included large payments at par to foreign banks in China and Europe. Read about how criticism of the Fed expanded

After losing a court battle, the Fed released more details about secret lending it did during the height of the financial crisis. A Bloomberg article in 2011 reported that the Fed had lent or guaranteed more than $7.7 trillion to ailing banks during the financial crisis.

However, the Fed disputed that figure, saying total credit outstanding under the Fed’s emergency liquidity programs was “never more than about $1.5 trillion.”

The Fed repeated in March that it doesn’t expect to record a loss on any of its emergency loan programs.

According to a Fed staff memo in 2011, the central bank acknowledged that it lent out a very large amount to banks during the crisis but “it was a necessary response to ensure that the crucial mistake made during the Great Depression — failing to prevent a collapse of the financial system — was not repeated.” Read about how the Fed expects to earn $77 billion from its balance-sheet explosion