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July 16, 2014 – Federal Reserve Board Chair Janet Yellen told lawmakers Tuesday that she would welcome a community banker to the Fed Board but said governors to the board should be selected based on current needs at the time of their appointment, not under mandate.

Yellen appeared before the Senate Banking Committee yesterday to deliver her report on the state of economy and the Fed's monetary policy report. Yellen will deliver a similar report to the House Financial Services Committee today.

During opening statements, both committee Chairman Tim Johnson, D-S.D., and Ranking Member Mike Crapo, R-Idaho, noted support for someone with community banking experience to serve on the Fed Board.

Sen. David Vitter, R-La., touched on the issue in his questioning of Yellen and noted his amendment to S. 2244, the reauthorization of the Terrorism Risk Insurance Act, which would require having a community banker on the Fed Board. The Senate Banking Committee may consider the bill this week. While Yellen said a community banker on the board would add a good perspective, she doesn't support mandating such a spot.

NAFCU President and CEO Dan Berger wrote the White House in April advocating for a credit union representative to serve on the Fed Board as well.

During Tuesday's monetary policy report, Yellen also discussed the Federal Open Market Committee's June policy meeting that indicated the Fed would likely complete its tapering program in October. When asked by committee members what would cause the Fed to change the October end date for tapering, she referred specifically to the labor market and inflation. If one or both of those becomes a problem, she said, the Fed would have to rethink its schedule.

Also, when Yellen was asked to identify areas of concern related to excessive risk-taking, she noted (among other things) banks taking on interest rate risk.