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A U.S. House of Representatives committee Tuesday advanced a bill that would open up the Federal Reserve Act to require the central bank to report on racial and ethnic disparities in labor market trends as well as direct the Fed to minimize disparities across racial and ethnic groups with respect to employment, income, wealth, and access to credit.

House Financial Services Committee Chairwoman Maxine Waters (D-CA) said her legislation would set no numerical targets or rules-based process for the Fed but it would give it a duty to reduce and eliminate racial economic disparities to the "greatest extent possible." Democrats cited comments from Atlanta Fed President Raphael Bostic last summer when he wrote in an essay that the Fed "can play an important role in helping to reduce racial inequities and bring about a more inclusive economy." The bill would need to be passed by the full House and Senate to become law.

Republicans in the House committee opposed the legislation, arguing it attacks central bank independence, saying the Fed's 'dual mandate' already includes a directive to achieve maximum employment.