Senate Republicans urged regulators on Thursday to slow down implementation of Dodd-Frank by extending the comment periods on their rule proposals and conducting more “rigorous” analysis on those rules.
During the first hearing held by the Senate Banking, Housing, and Urban Affairs Committee on regulators’ progress in implementing Dodd-Frank, Sen. Richard Shelby, R-Ala., ranking member on the committee, said that regulators are operating under an “unrealistic deadline under Dodd-Frank,” and he questioned whether the “speed of the [implementation] process” was undermining the public’s participation in commenting on the rules.
But Sen. Tim Johnson, D-S.D., chairman of the Committee, noted that while the task of implementing Dodd-Frank “must be done with great care to avoid unintended consequences that could impair economic growth,” the “effective and timely implementation” of Dodd-Frank “will help strengthen the economy by creating certainty for the business community, consumers and investors. In turn, that certainty will bring market participants back to the table and restore consumer and investor confidence.”
Noting the budget crunch that the Securities and Exchange Commission (SEC) and the Commodities Futures Trading Commission (CFTC) are under, Sen. Bob Corker, R-Tenn., asked SEC Chair Mary Schapiro whether it would make sense “to slow you guys down” in implementing Dodd-Frank so the agencies “can invest in technology and people.”
But Schapiro (left) replied that the budget constraints under the continuing resolution (CR) that the SEC is operating under is impacting the agency’s ability to fulfill its core mission, Dodd-Frank aside. The budget afforded to the SEC under the CR, she said, is hampering the agency’s ability to “hire examiners” and to allow those examiners to travel for enforcement cases and to allow the agency to build the technology “to do the job right now.”
As to Dodd-Frank, Schapiro went on to say that the SEC will need additional funding to examine hedge fund and municipal advisors as well as swaps dealers. “Getting the rules written [under Dodd-Frank] is a stretch and a challenge,” she said, “but the real crunch comes after the rules are in place and we have to operationalize them.”