Sanders has introduced a bill that would put an end to the practice. Currently, the banking industry picks three of the nine board members for the New York Federal Reserve, The Hill newspaper reported Wednesday.
Sanders said at least 18 financial industry executives that have been board members of a regional Fed office were among the beneficiaries of $4 trillion in low-interest federal loans since 2008, when the Fed initiated a series of measures to keep liquidity in the financial system.
Sanders said JPMorgan Chase & Co. Chairman and Chief Executive Officer James Dimon, who recently completed a term on the New York Fed's board, typifies the "fox guarding the hen house" conflict of interest.
"Jamie Dimon was the poster child for why we need to end the serious conflicts of interest at the Fed, but he was not alone. Two-thirds of the directors at the New York Fed are hand-picked by the same bankers that the Fed is in charge of regulating," Sanders said in a statement.
In pointing to Dimon, Sanders said JPMorgan & Chase received more than $390 billion in low interest Fed loans since the 2008 financial crisis.