Residency Requirements for Member of the Federal Reserve Board ( 1977 )

December 28, 1977
78-90 MEMORANDUM OPINION FOR THE COUNSEL
TO THE PRESIDENT
Federal Reserve Board— Residency of Board Member
(12 U.S.C. § 241)
You have asked for our opinion concerning the requirement in 12 U .S.C .
§ 241 that “ not more than one of whom [the Board of Governors o f the Federal
Reserve System] shall be selected from any one Federal Reserve d istric t. . . . ’’
We have been informed that the President wishes to nominate to the Board an
individual who resides and has his present principal business activities in a
district other than the district from which he is being selected. Specifically, we
understand that the nominee is to be “ selected from ” the Federal Reserve
district o f which the State o f Oklahoma is a part. It appears that the nominee
was bom in Oklahoma and spent the bulk of his childhood and adolescence in
Texas;1 after his graduation from high school he attended the Coast Guard
Academy, obtained his law degree from the University of California and was
admitted to the bars o f the States of California and New York. After practicing
law for several years in New York City, the nominee moved to Providence,
Rhode Island, where he has been in business in the private sector for
approximately 20 years.
It is our view that the language of the statute, its limited legislative history,
and the history of appointments to the Board of Governors indicate that
Congress did not intend to impose a strict residency requirement upon the
selection process. Therefore we do not think it necessary that the nominee
satisfy any strict residency or domicile requirement in order to be selected from
the Oklahoma district.
First, the plain language o f § 241, when read in its entirety, reflects the
congressional intent. W hile the first clause in the pertinent sentence from § 241
states that no more than one member shall be “ selected from any one Federal
Reserve district,” the remainder of the sentence instructs the President to
“ have due regard to a fair representation of the financial, agricultural,
industrial, and commercial interests, and geographical divisions o f the coun­
try .” Plainly, the statute was not drafted as a residency requirement. In other
'N o part of T exas falls within the district o f which O klahom a is a part.
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contexts, of course, Congress has specified that nominees to Federal agencies
shall be residents o f the districts they represent. See, e.g . , 12 U .S.C . § 2242(c)
(1971) (Federal Farm Credit Board); 10 U .S.C . § 9342 (Air Force Academy
cadets). Had Congress intended to impose a domicile or residency requirement
it could have done so. Instead, it instructed the President to seek nominees who
could represent fairly the diversity o f geographical and other interests within
this country.
Second, our reading o f the statute is supported by the following explanation
of § 241 from the House Report:
The provision that the President in making his selections shall so
far as possible select them in order to represent the different
geographical regions of the country has been inserted in very general
language in order that, while it might not be minutely mandatory, it
should be the expressed wish o f the Congress that no undue
preponderance should be allowed to any one portion o f the Nation at
the expense of other portions. The provision, however, does not bind
the President to any slavish recognition o f given geographical
sections. [H.R. Rept. No. 69, 63d C ong., 1st sess. 43 (1913).]2
Third, the history of appointments to the Federal Reserve Board of
Governors indicates that Congress itself has not read § 241 as imposing a strict
residency requirement. Several examples might be cited:
In 1914, Adolph C. M iller of California was first nominated, confirmed, and
appointed to the Board from the San Francisco district. He, as have other
Governors, apparently moved to the W ashington, D .C ., area to take up his
full-time responsibilities as a Governor. He was then reappointed from the San
Francisco district in 1924 for another 10-year term and, in the President’s
nomination, was said to be from California, 65 Cong. Rec. 8804 (1924). In
1934, Mr. M iller was again nominated for another term , but this time he was
identified as being “ of the District of Colum bia” and was reappointed and
served for the Richmond district.
One o f the presently serving Board members, Andrew F. Brimmer, is a
second example. Mr. Brimmer was bom in Louisiana and served in many
positions in academ ia, the Federal Governm ent and the private sector before his
nomination to the Board in 1966. At the time o f his nomination he lived in the
W ashington area and was an Assistant Secretary at the Commerce Department.
Immediately before coming to C om m erce, Mr. Brimmer was a faculty member
at the W harton School of Finance and Commerce in Philadelphia for several
years, that being his only contact with Philadelphia. He was “ selected from ”
the Philadelphia district based on that contact.
Another presently serving Board member, Robert C. Holland, is a third
example. Mr. Holland was bom in Nebraska in 1925 and lived there until about
2We have been unable to find any other relevant legislative history. The Senate report on the bill
is not enlightening and was not a m ajority report, the bill having been reported out o f com m ittee
without recom m endation. See S. Rept. 133, 63d C o n g ., 1st sess. (1913). The legislative debates,
while exhaustive, are likewise not relevant to the question posed herein. See 50 Cong. Rec. 4638 et
seq. (1913); 51 Cong. Rec. 274 et seq. (1913).
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the age o f 21. He then received degrees from the University of Pennsylvania
and was an instructor at the Wharton School from 1948-49. He then entered
Federal employment, serving from 1949 to 1961 with the Federal Reserve Bank
in Chicago, and then held a number o f positions in W ashington on the staff of
the Board of Governors until his nomination and appointment as a Governor
“ selected from” the Kansas City district (of which Nebraska is a part).
Yet another example is form er Board member James Louis Robertson. He
was bom in Nebraska, obtained his undergraduate degree from George
Washington University, and received his law degree at Harvard. He became a
career Government employee and at the time o f his nomination had worked for
the Federal Government for 24 years. Despite the fact that his career and
professional training were centered in the East, he was selected from the
Kansas City district. See Hearing Before the Senate Committee on Banking and
Currency, 88th C ong., 2d sess., p. 7 (1964).
Given these precedents, coupled with the language of the statute and its
relevant legislative history, we think that the President might well conclude that
a nominee who was bom in Oklahoma and who was raised in that part of the
country could fairly represent the “ financial, agriculture, industrial, and
commercial interests” o f the geographical area covered by the Kansas City
district. Ultimately, o f course, Congress will have an opportunity in the
confirmation process to consider the desirability o f that judgm ent.3
Larry A. H am m ond
A cting A ssistant Attorney G eneral
Office o f L egal Counsel
3A s written, the statute suggests that Congress may focus not only on the question o f the
nom inee's ability to represent the region from which he is selected, but also on the question
whether the nom inee m ay occasion an over-representation o f some other district (in this case the
district covering Rhode Island). O ur analysis would indicate, how ever, that the im portant inquiry
will focus upon the substantiality o f the nom inee’s contracts with, and know ledgeability about, the
district from which he is selected rather than upon his contacts and relationships in som e other
region.
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