A bipartisan group of 15 legislators, ranging from progressive Senator Elizabeth Warren to conservative Representative Scott Garrett, has released a letter calling for stronger limitations on the use of Federal Reserve emergency lending powers. The Fed’s emergency lending programs were a central part of the 2008-2009 financial-sector “bail outs.” The Dodd-Frank Act mandated new limits on such emergency lending. Today’s letter strongly criticizes the Federal Reserve’s proposal to implement these new limits, saying that the proposal places “no meaningful restrictions” on lending powers and leaves the door open to a future “backdoor bailout” of Wall Street.

AFR welcomes this letter and applauds the efforts of legislators to address this issue. Creating real limits on arbitrary and open-ended bailouts of giant Wall Street banks is a critical element of financial reform and one that unites Americans across the political spectrum.

For further background on the issue of Federal Reserve emergency lending, see joint AFR/Cato Institute op-ed and AFR comment letter to the Federal Reserve on its emergency lending proposal.