The House Financial Services Committee passed late Thursday the SEC Regulatory Accountability Act, H.R. 2308, which requires the Securities and Exchange Commission, in accordance with President Barack Obama’s executive order, to conduct robust cost-benefit analysis on each new rulemaking.
Rep. Scott Garrett, R-N.J. (left), chairman of the Financial Services Subcommittee on Capital Markets and Government-Sponsored Enterprises, introduced the bill in June with 15 original cosponsors. The bill now goes to the full House.
The SEC Regulatory Accountability Act requires the SEC to conduct robust cost-benefit analysis on each new rulemaking to ensure that its benefits do not outweigh its costs, and would make certain that all new and existing regulations are accessible, consistent, written in plain language, and easy to understand.
Rep. Barney Frank, D-Mass., ranking minority member on the financial services committee, said in a statement that the effect of the legislation “would be to cripple the ability of the SEC to carry out its regulatory functions, and make it difficult to protect investors even when the SEC has evidence of wrong-doing. The bill would also increase operating costs for the agency without increasing its budget, thereby forcing it to divert funds from other actions such as enforcement.”