House Task Force hearing defends regional Federal Reserve design while probing gaps in oversight and technology

Chairman Lucas opened the field hearing in Oklahoma City saying the session was “entitled examining the structure of the Federal Reserve System,” and he framed the discussion around accountability, regional representation and the Fed’s independence.

Several witnesses — Thomas Hoenig of the Mercatus Center, former Kansas City Fed President Esther George, Dallas Fed deputy board chair Gary Kelly and Benjamin Keene, associate professor of economics at the University of Oklahoma — all testified that the 12‑bank, decentralized design remains central to supplying local economic context to national monetary policy. Thomas Hoenig told the task force that the Fed’s structure “divides power between a central and regional authorities and between public and private interests,” arguing the arrangement insulates policy from short‑term political pressure.

Esther George emphasized operational and public‑trust benefits of the regional system, noting boards, advisory councils and regional research feed timely input to the Federal Open Market Committee and the public. Gary Kelly described how the Dallas Fed’s industry surveys and advisory councils, including energy and border trade expertise, provide “firsthand insights” that inform FOMC deliberations. Benjamin Keene said regional Reserve Banks create research and educational opportunities for economists and students outside Washington.

Lawmakers used questioning rounds to press witnesses on several recurring issues. Representative Andy Barr and others asked whether the 12‑bank map should be reapportioned in light of population shifts; witnesses said boundaries have changed historically, but statutory constraints and operational costs make major re‑maps unlikely. Members also asked about proposals to fold some Fed supervisory functions into other agencies; witnesses warned that the Fed’s unique lending role and discount‑window function provide synergies for financial‑stability supervision.

On payments, members repeatedly brought up Fed‑led projects such as FedNow and the possibility of a central bank digital currency (CBDC). Esther George said she was “not aware that the Federal Reserve is working on a central bank digital currency” for retail use and emphasized that the Fed pays close attention to public oversight directions and congressional authority on such work. Members pressed transparency and the Fed’s published annual reports as sources for budget and operational detail; witnesses pointed to public reports and figures the Fed posts online.

Lawmakers also asked witnesses how technology and artificial intelligence might change the Fed’s information flows. Witnesses acknowledged AI and other data tools will alter data access and analytics but emphasized there is no substitute for local, human‑sourced context: economic actors and regional banks add immediacy and nuanced perspective that algorithms cannot fully replace.

The hearing produced no formal actions or votes. Chairman Lucas closed the hearing by inviting written supplemental questions and setting a deadline for witness responses. The record shows broad support among the witnesses for retaining the regional, federated design while identifying operational, cultural and transparency areas for congressional oversight.

The committee adjourned with witnesses asked to respond to additional questions by July 17, 2026.