Members of Congress introduce legislation to roll back Dodd-Frank and limit funds appropriated to financial regulatory agencies
Some members of Congress are attempting to moderate the pace of implementation of the Dodd-Frank Act by seeking to limit appropriations for implementing agencies and by introducing legislation to amend or repeal parts of the Act.
Dodd-Frank requires more than ten agencies, including the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission, to impose new regulatory requirements on financial institutions, private-equity firms, and insurance companies, among others. The Act also establishes a new Consumer Financial Protection Bureau to impose and enforce regulations on consumer financial institutions.
Agencies responsible for implementing Dodd-Frank have requested increased Congressional appropriations. Mary Schapiro, the chair of the SEC, argued in a Senate hearing that the agency needed increased funding to perform its new responsibilities under Dodd-Frank. A recently released report by the Boston Consulting Group found that the SEC needed more staff to implement Dodd-Frank requirements “while maintaining its activities as currently performed.”
The Obama Administration’s fiscal 2012 budget plan proposes providing $1.4 billion to the SEC in 2012, an increase of $264 million from the previous year. Republicans who are focused on cutting spending are trying to block or limit such increased appropriations. Members of the House Financial Services Committee also recently proposed cutting current funding to the SEC by $25 million.
Congressional Republicans have also proposed several pieces of legislation to amend or repeal parts of Dodd-Frank. One bill would exempt private-equity firms from SEC registration, and another would provide a similar exemption to companies offering less than $50 million in securities. Another proposal would repeal a Dodd-Frank requirement that companies disclose how much they are paying to their CEOs compared to their median employees. Members of Congress have also proposed removing Dodd-Frank’s imposition of liability on credit-rating agencies for providing inaccurate ratings.
Only one Dodd-Frank reform bill, The Consumer Payment System Protection Act, has so far won bipartisan support. That bill, which has been introduced both in the House and the Senate, would delay implementation of rules setting caps on debit card fees for merchants.