Bill: Pending Reserve Requirements Amendment Act

[Omegabiebel]

A
BILL
To

Require Banks to Keep their Reserve with the FRB​

The people of the Commonwealth of Redmont, through their elected Representatives in the Congress and the force of law ordained to that Congress by the people through the constitution, do hereby enact the following provisions into law:

1 - Short Title and Enactment
(1) This Act may be cited as the 'Reserve Requirements Amendment Act.'
(2) This Act shall be enacted immediately upon its signage.
(3) This Act has been authored by Senator CaseyLeFaye and Speaker Omegabiebel.
(4) This Act has been co-sponsored by Senator CaseyLeFaye.

2 - Reasons
(1) As it currently stands, banks are very unlikely to comply with reserve requirements.
(2) Allowing the Federal Reserve to mandate that banks must keep their reserve within the Reserve Bank ensures that banks cannot illicitly use their reserve.
(3) To amend the Federal Reserve Act.

3 - Terms
(1) Sub-subsection 5(1)(e) of the Federal Reserve Act shall be amended as follows:

“(e) Reserve Requirements​

(i) The Reserve Bank sets reserve requirements, which are the minimum amounts of funds that commercial banks and credit unions must hold in reserve against their deposits. By adjusting these requirements, the central bank affects the amount of money banks can lend and the money multiplier.​

(ii) The Reserve Bank has the authority to require commercial banks and credit unions to hold this reserve within the Reserve Bank.”​

(2) Section 9 of the Federal Reserve Act shall be created as follows:

“9 - Offenses​

(1) Reserve Requirement Violation​

(a) Classification: Indictable Criminal Offense​

(b) Definition: The act of failing to meet reserve requirements after seven days’ notice from the Federal Reserve.​

(c) Punishment per Offense: a fine of up to $20,000 + forceful transfer of the reserve amount to the Reserve Bank. ”​