11.6.2017

Durham, NC.— Eleven elected officials from throughout the Richmond Federal Reserve region submitted an open letter to the Richmond Federal Reserve demanding the appointment of a Fed president who represents the interests of the communities they serve. Local elected officials expressed the importance of selecting a Fed president who is independent from the financial sector and who reflects the diversity of the region. Just days after Donald Trump announced Jerome Powell would serve as the next Fed Chair and William Dudley announced that he would retire as New York Federal Reserve President in 2018, the Richmond Federal Reserve President, who will also be a voting member of the Federal Open Market Committee in 2018, has not yet been announced.

When Jeffrey Lacker resigned as president of the Richmond Fed last April, after admitting to leaking market-sensitive information to a hedge fund analyst, members of Congress wrote the Richmond Fed insisting a transparent and publicly inclusive process for choosing Lacker’s replacement. Lawmakers highlighted that one quarter of the current Reserve Bank presidents are alumni of Goldman Sachs. Representation from labor makes up only 4% of representation of directors, and individuals from academic and non-profit backgrounds each comprise only 7%.  Over 14,000 individuals across the country signed a petition insisting that the selection of a diverse, independent Richmond Fed president is a key step in tackling economic inequality in the U.S. The process for choosing Lacker’s replacement has dragged on in the months since Lacker’s resignation and the Richmond Fed board has disclosed very little information. Now, elected officials from Durham, NC to Alexandria, VA are echoing the call from congressional members, stressing the importance of selecting a Richmond Fed president who will represent the public. This is an escalation after 32 organizations including the NAACP and the AFL-CIO signed and delivered a letter to Fed Chair Yellen and the Board of Governors urging that the next Richmond Fed President reflect the racial and economic diversity of the south. National leaders noted that the vacancy at the Richmond Federal Reserve provides an opportunity to finally appoint someone who represents people of color after over 100 years of uninterrupted governance by exclusively white, male Richmond Federal Reserve Bank presidents.

The letter’s release follows Donald Trump’s nomination of Jay Powell as Federal Reserve Chair-- a move that served to undermine recent progress toward greater diversity at the Fed. Trump’s two appointments to the Fed thus far are white men with nearly identical backgrounds at the same private equity firm. Although the decentralized structure of the Federal Reserve System is supposed to result in a diverse range of voices contributing to monetary policy, the  continual failure of  regional Reserve Banks to appoint leaders of color from outside the corporate and financial sector has drawn scrutiny in recent years. Right now the Federal is in a historic level of transition with Donald Trump appointing three -- and potentially four -- members of the Board of Governors and the permanent FOMC member, the New York Federal Reserve’s Dudley, stepping down in the coming months.

Against this backdrop, local officials urged the Richmond Fed Board to “elevate the perspectives of individuals from labor, community, and academic backgrounds who will enhance the Federal Reserve System’s independence and credibility with the public, as well as its ability to fulfill its full employment objective.” This letter is still being circulated to local elected officials and more signatories are expected.

“The circumstances under which Lacker resigned underscore the importance of choosing Federal Reserve leaders who are independent from the financial sector,” said Michael De Los Santos, Deputy Director at Action NC, which organized the letter. “Especially as Donald Trump appoints a series of Wall Street insiders to key positions at the Fed and other agencies, it has never been more important to have the Fed include a diverse array of decision-makers who understand what the economy is like for working people.”
 

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www.thepeoplesfed.org

Fed Up is a coalition of community organizations, labor unions, and policy experts across the country calling on the Federal Reserve to reform its governance and adopt policies that build a strong economy for the American public.

Contact: Jordan Haedtler, (650) 400-4116, jhaedtler@populardemocracy.org