Bill Overview
Title: To amend the Federal Reserve Act to prohibit the Federal reserve banks from offering certain products or services directly to an individual, and for other purposes.
Description: This bill prohibits a Federal Reserve bank from offering products or services directly to an individual, maintaining an account on behalf of an individual, or issuing a central bank digital currency directly to an individual.
Sponsors: Rep. Emmer, Tom [R-MN-6]
Target Audience
Population: Individuals interested in non-conventional banking services
Estimated Size: 1000000
- The Federal Reserve is the central banking system of the United States, thus the direct jurisdiction primarily affects U.S. citizens.
- Individuals who are unbanked or underbanked could be impacted, as they might seek banking services directly from the Federal Reserve if available.
- People interested in using potential services such as central bank issued digital currencies directly from Federal Reserve banks would be affected.
- Given the global interconnectedness of financial systems, similar policies might inspire or align with regulations in other countries, affecting individuals globally who follow U.S. regulatory changes.
Reasoning
- The policy primarily impacts individuals who are interested in using a government-backed digital currency or those who have difficulties with traditional banking services.
- Implementation costs are constrained within a budget, and due to the niche interest in central bank digital currencies, the impact will vary.
- Many individuals are either not impacted at all or only experience minor changes as they may not rely on or be interested in federal digital banking services.
- Unbanked populations might have less direct concern since they may not be currently seeking Federal Reserve services, yet long-term potential could differ.
- Due to the policy's preventative nature rather than implementing something new, many people may not see a change in their daily lives or immediate wellbeing.
Simulated Interviews
Software Developer (Los Angeles, CA)
Age: 45 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 1.0 years
Commonness: 5/20
Statement of Opinion:
- I was curious about how a Federal Reserve digital currency might impact the financial tech space.
- This policy seems to limit innovation in digital currencies in government banking.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 8 |
| Year 2 | 6 | 8 |
| Year 3 | 6 | 8 |
| Year 5 | 6 | 8 |
| Year 10 | 7 | 8 |
| Year 20 | 7 | 8 |
Retired Teacher (Austin, TX)
Age: 60 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 0.0 years
Commonness: 15/20
Statement of Opinion:
- I don't quite understand digital currencies, so it doesn't directly affect me.
- It seems like it's a policy for something that doesn't exist yet.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
Freelancer (Brooklyn, NY)
Age: 30 | Gender: other
Wellbeing Before Policy: 5
Duration of Impact: 3.0 years
Commonness: 7/20
Statement of Opinion:
- I was hoping there would be a safer government option for digital banking.
- This policy feels like it shuts down an avenue for people like me who don't use traditional banks.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 4 | 5 |
| Year 2 | 4 | 6 |
| Year 3 | 5 | 6 |
| Year 5 | 5 | 6 |
| Year 10 | 5 | 6 |
| Year 20 | 6 | 7 |
Student (Chicago, IL)
Age: 25 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 2.0 years
Commonness: 10/20
Statement of Opinion:
- I think this policy is unnecessary at this point; digital currency by the Fed could innovate the banking system.
- I guess my life won't change much until digital currencies are more common.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 8 |
| Year 2 | 6 | 8 |
| Year 3 | 7 | 8 |
| Year 5 | 7 | 8 |
| Year 10 | 7 | 8 |
| Year 20 | 8 | 9 |
Small Business Owner (Salt Lake City, UT)
Age: 50 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 1.0 years
Commonness: 12/20
Statement of Opinion:
- I see digital currency as an opportunity for easier, more secure transactions.
- This policy feels like a missed opportunity for progress.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 6 |
| Year 2 | 5 | 6 |
| Year 3 | 5 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 7 |
College Student (Miami, FL)
Age: 19 | Gender: male
Wellbeing Before Policy: 4
Duration of Impact: 5.0 years
Commonness: 8/20
Statement of Opinion:
- I was considering digital currencies issued by the government as a secure starting point for investments.
- This makes me less sure about finding secure options.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 4 | 5 |
| Year 2 | 4 | 6 |
| Year 3 | 4 | 6 |
| Year 5 | 4 | 6 |
| Year 10 | 5 | 6 |
| Year 20 | 6 | 7 |
Retired (Rural Kansas)
Age: 70 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 0.0 years
Commonness: 20/20
Statement of Opinion:
- None of these digital currency talks impact me much.
- The policy doesn't seem to change anything in my day-to-day life.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 7 |
Tech Entrepreneur (Seattle, WA)
Age: 38 | Gender: female
Wellbeing Before Policy: 9
Duration of Impact: 4.0 years
Commonness: 6/20
Statement of Opinion:
- A Federal Reserve digital currency could have set new standards.
- The policy is a setback in federal-level competitive fintech growth.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 9 |
| Year 2 | 8 | 10 |
| Year 3 | 7 | 10 |
| Year 5 | 8 | 9 |
| Year 10 | 8 | 10 |
| Year 20 | 8 | 10 |
Financial Analyst (New York, NY)
Age: 55 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 1.5 years
Commonness: 4/20
Statement of Opinion:
- This policy doesn't surprise me; central banks usually don't rush into individuals' services.
- However, I think they should explore digital currencies further.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 9 |
| Year 3 | 8 | 9 |
| Year 5 | 8 | 9 |
| Year 10 | 8 | 9 |
| Year 20 | 8 | 9 |
Freelance Artist (San Francisco, CA)
Age: 29 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 3.0 years
Commonness: 9/20
Statement of Opinion:
- A digital currency by the Fed felt secure without dealing with traditional banks.
- I'm concerned this policy limits my options.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 4 | 5 |
| Year 2 | 4 | 6 |
| Year 3 | 4 | 6 |
| Year 5 | 4 | 6 |
| Year 10 | 5 | 6 |
| Year 20 | 5 | 7 |
Cost Estimates
Year 1: $5000000 (Low: $2000000, High: $8000000)
Year 2: $5000000 (Low: $2000000, High: $8000000)
Year 3: $5000000 (Low: $2000000, High: $8000000)
Year 5: $5000000 (Low: $2000000, High: $8000000)
Year 10: $5000000 (Low: $2000000, High: $8000000)
Year 100: $5000000 (Low: $2000000, High: $8000000)
Key Considerations
- There may be legal compliance costs associated with monitoring and enforcement of the prohibition on direct services.
- The potential adoption of a central bank digital currency (CBDC) by other nations could put the U.S. at a competitive disadvantage if similar bans are not implemented globally.
- Limited direct financial impact as the Federal Reserve traditionally does not provide these services to individuals.