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McKinley says D.C. uneasy with The Fed

WHEELING — There is an undercurrent of opposition among Washington lawmakers regarding the Federal Reserve, U.S. Rep David McKinley said Wednesday as he made several stops in Wheeling.

McKinley, R-W.Va., met with a group of local bankers at West Virginia Northern Community College to learn more about their concerns and issues, and how they are affected by the workings of the Federal Reserve Board.

“There is a lack of transparency with the Federal Reserve. They are in place to aid the financial industry in this country, yet they were little help to bankers during the Great Depression. Where were they then?” McKinley said.

The congressman said it is especially disconcerting because West Virginia has been deemed one of four states — all coal states — that has “dropped back into a recession.”

The Federal Reserve was established by the U.S. Congress in 1913. It was tasked with studying and implementing monetary policy. Prior to the Federal Reserve, the Gold Standard was used by countries to set the prices of their domestic currencies in terms of a specified amount of gold.

The Federal Reserve is an independent entity and is subject to oversight from Congress, although its decisions do not have to be approved by Congress or the president.

McKinley said he wants local bankers to provide a look into how the Federal Reserve does or does not benefit their industry in today’s market.

He said the recession also has affected the real estate business, and he planned to meet with local agents to see how they are faring, particularly regarding the impact of high flood insurance premiums on home sales.

“I want to know what more should we be doing in Washington to help the real estate industry. The flood insurance debacle will be back before lawmakers in Washington as the current program expires in 2017,” McKinley said. “That program is $23 billion to $25 billion in the red. We need to talk about the feds getting out of it and allow the general market to determine premiums.”

McKinley said, however, insurance companies must be held in check to assure policyholders are not being unfairly overcharged. He said Washington has treated coastal states with flooding issues differently than landlocked West Virginia when it comes to flood insurance.

“Now I want to see what they do with the folks in Louisiana,” he added.

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