Senate Banking Committee Chairman Richard Shelby, R-Ala., announced a draft bill Tuesday that would make widespread changes to the Dodd-Frank Act. File Photo by Kevin Dietsch/UPI | License Photo

WASHINGTON, May 12 (UPI) -- The head of the Senate Banking Committee unveiled a bill Tuesday that increases congressional scrutiny of the Federal Reserve and eases some regulatory burdens on dozens of small banks.

Senate Banking Committee Chairman Richard Shelby, R-Ala., who described the draft legislation as a "working document," tackles a number of areas of reform, including requiring the Fed to disclose more information to Congress about policy decisions. The bill could also loosen the aggressive oversight to banks that include U.S. Bancorp and SunTrust Banks enacted under the Dodd-Frank Act.


It is considered the most ambitious effort to revamp Dodd-Frank since it was enacted in 2010.

"This discussion draft is a working document intended to initiate a conversation with all members of the committee who are interested in reaching a bipartisan agreement to improve access to credit and to reduce the level of risk in our financial system," Shelby said in a written statement. "I look forward to engaging with members of the committee on specific proposals in the discussion draft."

Among the draft's proposals:

-- Loosening regulations on the country's smallest banks, including relief from annual privacy disclosure requirements and authorization for privately insured credit unions to become members of the Federal Home Loan Bank system.

-- Greater transparency of the Financial Stability Oversight Council, which monitors risks to the financial system.

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-- Requiring the Federal Open Market Committee, the Fed's policy-making committee, to deliver quarterly reports to Congress containing analysis and data regarding its monetary policy decisions.

-- Requiring the president of the Federal Reserve Bank of New York be appointed by the White House and confirmed by the Senate.

The draft legislation has already received criticism. Sen. Sherrod Brown, D-Ohio, the top Democrat on the Senate Banking Committee, said the proposal, "holds Main Street financial institutions hostage to a partisan effort to dismantle Dodd-Frank's consumer protections and sensible rules for the large banks and nonbanks that played central roles in the financial crisis."