Washington D.C. – Today, U.S. Senator Cynthia Lummis (R-WY) questioned Jay Powell during his nomination hearing to serve a second term as President Biden’s Chair of the Federal Reserve Board of Governors. The Federal Reserve is the central bank of the U.S. and monitors financial institutions and their impact on broader financial stability.
Senator Lummis pressed Powell over the Fed’s delay in approving master accounts and access to the payment system for two Wyoming special purpose depository institutions (SPDIs), which the state has chartered as banks and which are legally entitled to access under Federal law. The Fed is required by law to respond within one year, and is currently acting in an illegal manner.
Powell responded that there were good arguments that the SPDI should be considered a depository institution and that the Federal Reserve would be making progress on the applications soon.
“Time and time again, the Federal Reserve has delayed Wyoming’s attempts to promote responsible financial innovation,” Senator Lummis said. “The Fed is simultaneously ignoring its congressionally mandated duty to approve Wyoming’s SPDIs and failing to address inflation, while instead focusing its resources on politically charged issues like climate and race. My job is to ensure the Fed does its job: execute federal law without bias, and focus on our nation’s economy. Right now, the Fed is failing the people of Wyoming on multiple fronts, and Chair Powell is responsible.”
In 2019, Wyoming began working with the Federal Reserve to discuss special purpose depository institutions (SPDIs), heavily regulated banks that are intended to bring digital assets into the regulatory perimeter for the first time. Among the questions Wyoming expected the Fed to address in a timely manner was whether SPDIs should be considered “depository institutions” and have access to the Federal Reserve’s payment system. Two years later, the Federal Reserve has yet to provide an answer, which is hurting businesses and preventing Wyoming’s long-sought economic diversification. The Fed’s delay also violates the law.
In November, Senator Lummis wrote an op-ed in the Wall Street Journal detailing the Fed’s failures, and how it was impacting her decision whether to support Chair Powell’s nomination.