Dodd-Frank supporters are criticizing a proposal in the House to restructure the Securities and Exchange Commission, claiming its intentions are to defund the agency and starve it from its ability to enforce new regulations.
The draft proposal, written by House Financial Services Committee Chairman Spencer Bachus (R-Ala.), would undo certain organizational changes required in Dodd-Frank and the Consumer Protection Act, according to News.Gnom.es.
Rep. Barney Frank (D-Mass.), the committee’s ranking member, said the bill is the work of anti-regulation ideologues who seek “an excuse for underfunding the agency,” News.Gnom.es reports.
Bachus based his legislation on last year’s report from the Bethesda, Md.-based Boston Consulting Group, which recommended re-prioritizing SEC regulatory activities, reshaping the organization and investing in enabling infrastructure.
SEC spokesman John Nester said the agency is using similar recommendations to evaluate improvement in the structure, operations and processes of the agency. The agency, however, prefers to conduct any reform internally rather than being mandated by law.
“By continuing to undertake reforms internally rather than legislatively, we can more readily adapt our structure to market dynamics as they evolve,” Nester said, according to News.Gnomes.es. “Of course, in the past two years, the agency has undergone significant reform, including restructuring entire divisions, creating specialized units, eliminating a layer of management and putting qualified attorneys back on the enforcement front lines, and ensuring greater intra-agency collaboration.”
In August, former SEC Chairman Arthur Levitt, Jr., wrote an op-ed in The New York Times expressing his thoughts against Bachus’ proposal, referring to it as “an almost comical intrusion into the inner workings of the commission,” according to News.Gnomes.es.
Jeff Mahoney, the general counsel of the Council on Institutional Investors, is also contributing to the argument against legislative reform efforts for the SEC and said that Bachus’ proposal is driven by people who are against Dodd-Frank who see this as a way to defund the agency.
“Even though the SEC has made some mistakes, it is not helpful to have Congress micromanage an independent agency, particularly the main one that focuses on investors,” Mahoney said, according to News.Gnomes.es.
Bachus plans on holding a full hearing on his draft when Congress resumes session after its August break.