By Howard Schneider

WASHINGTON (Reuters) – U.S. consumer and public interest groups on Monday kept up the pressure on Federal Reserve Chair Jerome Powell to impose stricter ethics rules on Fed officials, after two Fed bank presidents resigned because of controversial investing activity last year.

Jeff Hauser, the head of progressive Revolving Door Project said that Powell will be being appointed for a fourth four-year term.

Hauser stated that Powell should have referred to the U.S. Securities and Exchange Commission and Department of Justice for Rosengren and Kaplan investigations.

These figures should not be allowed to quit and go into private equity, consulting or hedge fund management within six months.

On Monday, Kaplan and Rosengren [L1N2QT0ZZ] announced their imminent resignations after disclosure of their active trading activity during 2020, when the Fed was moving aggressively to bolster the economy with steps that ultimately drove asset markets to record highs.

Fed critics say the U.S. central banks needs more strict ethics standards. Both men stated that their trading activity was approved and reported with ethics rules prohibiting the misuse of Fed market-moving information.

Dennis Kelleher of Better Markets, a think tank on financial regulations said that the resignations were “grossly inadequate”. Powell should make “full disclosure” of all Fed traders during the pandemic, as well as any nonpublic information.

Fed officials have to follow the same ethics guidelines as Congressmen and top officials in government. Federal Open Market Committee meeting days are when most sensitive information is released. They are also prohibited from trading and they are forbidden to have financial stocks or mutual funds.

A broad order is also in place to prevent any conflict of interests. The public was touched by their active investment in 2020 when many millions of unemployed people. They quit less than three weeks later after the Sept. 7 Wall Street Journal reported on their investments.

Powell opened an extensive review of Fed ethics rules, and promised to make changes at a conference last week. When asked if he believed in Rosengren and Kaplan, he responded with the curt “nobody is happy”.

Kaplan stated that he quit because his activities “risked becoming a distraction to the Fed.” Rosengren stated that his long-standing health problem was getting worse and that it would be easier to manage with lifestyle changes. Rosengren was approved to join the kidney transplant waiting list in June 2020.

The White House had not commented on the Fed resignations. While President Joe Biden has not yet decided whether to appoint Powell, he is considering whether to give him a new four-year term after his current expires in February.

The Senate banking committee will have to approve Powell’s nomination. It may be clearer whether the issue has an impact on Powell’s chances of success. A Democrat, Senator Elizabeth Warren of the Senate banking committee has repeatedly criticized Powell’s financial oversight and has also called for stricter Fed ethics regulations.

Many investors consider Powell’s reappointment probable. Many of Biden’s progressive supporters claim that the Fed chief has established a successful monetary policy to combat the pandemic. Republicans also support him.