Spencer Bachus, the chairman of the House Financial Services Committee, said in the Financial Stability Oversight Council’s annual report that the 2010 Dodd-Frank Act has only added to the regulatory burden.
“When financial reform was debated by Congress two years ago, Republicans suggested an alternative that would have consolidated the number of regulators,” Bachus said. “Instead, the Dodd-Frank Act passed by Congress eliminated one regulator, kept the others, added three more and put them on the Financial Stability Oversight Council. We were told this ‘super committee’ of regulators was needed to act as an early warning system that would perceive threats far off in the distance and take action before these threats could metastasize into crises that bring down our economy.”
Bachus said that “there is little to no evidence” that the FSOC has been effective in attaining those goals or fulfilling those duties.
“Indeed, some of the most ardent supporters of Dodd-Frank are among the Council’s harshest critics,” Bachus said. “Sheila Bair, the former [Federal Deposit Insurance Corp.] chairwoman who served as a member of the Council, told the New York Times recently the FSOC is M.I.A. Others have chided the Council for failing to live up to its most basic promises of accountability and transparency.”
Bachus added that regulators are “preoccupied” with issuing new rules and are “missing the basics.”
“Rather than pass massive new laws that require hundreds of new regulations, it’s a better use of limited resources to make sure regulators are enforcing the rules we already have,” Bachus said. “Clear rules and better enforcement of them will do more to protect consumers, investors and the financial system than a ‘super committee’ of regulators.”