Heritage Action, the political arm of the Heritage Foundation and one of the most influential elements of the broader conservative movement, urged lawmakers on Monday to oppose Janet Yellen's nomination to head the Federal Reserve, even going so far as marking the Yellen nomination as "key vote," meaning it will be reflected on each lawmaker's "legislative scorecard."
According to a release from Heritage Action, the group opposes Yellen due to her support for current Fed policy as well as her statement that the Fed should use its powers to "level the playing field" between small and large banks. Heritage also registers "growing concern" over the Fed's "expanded role" under Dodd-Frank, and frets over the possibility that the Fed is becoming "more political."
From Heritage Action (emphasis theirs):
[T]here is growing concern that the Federal Reserve’s expanded role in the aftermath of the financial crisis and enactment of Dodd-Frank are causing it to become more political. According to Heritage, “a more politicized Fed threatens to destroy what is left of that image and place partisan concerns above sound monetary policy.” During her confirmation hearing, Yellen promised to use the Fed’s expanded powers to “level the playing field” between large banks and small and to “make it tougher for them to compete.” Heritage has warned against a process that “gives nearly unconstrained discretion to regulators” and instead suggested “a modified version of existing bankruptcy law, with the legal protections and independent judges it provides.”
It is ironic that the Federal Reserve “has emerged from the financial crisis as more powerful than ever despite having supplied much of the capital that fed the housing bubble.” In fact, the Bank appears to be doubling down on that behavior “by purchasing more than $1.7 trillion worth of mortgage-backed securities.” Although Yellen acknowledged the current size of the portfolio is “unprecedented” she did not present a plan to roll back the Federal Reserve’s engagement in such activities.
Heritage Action opposes the nomination of Janet Yellen and will include it as a key vote on our legislative scorecard.