-5-  It starts by creating two tests: a retail test and community development test (figure 1). Broadly speaking, all retail banks would be evaluated under a retail test, which would assess a bank’s record of providing retail loans and retail banking services in its assessment areas.
In particular, during the Great Recession, instrument independence afforded the FOMC the flexibility needed to develop new tools that could address the large and extraordinary challenges it faced in pursuing its dual mandate. The legislative proposals just discussed appear to be motivated by the belief that the Fed’s response during the crisis was somehow ineffective or inappropriate.