Consumer Group Rails Against House Passage of Red Tape Reduction Act

But Roper told AdvisorOne that “the SEC is already subject to economic analysis requirements that industry has used successfully to challenge agency rulemakings,” Roper says.

“The court decision in the proxy access case set an unreasonably high bar that the SEC is struggling to deal with as it implements Dodd-Frank,” Roper says, and “the CFTC has already seen two of its rules challenged on these grounds.”

Roper went on to say that “increasingly, commissioners who don’t like rule proposals frame their dissent in ways that are designed to provide support for just such a legal challenge. The legislation would make the problem worse by increasing the requirements for the agencies with regard to the analysis—requiring, for example, that they analyze every possible alternative regulatory approach—and increasing the avenues for legal challenge on these grounds.”

The same people who favor this approach, “also want to starve the two agencies of the funding they need to carry out their rulemaking obligations,” she says. “If they really cared about improving the agencies’ economic analysis—as opposed to just throwing additional sand in the wheels of the regulatory process—you’d think they be willing to fund it accordingly.”

Dale Brown, president of the Financial Services Institute (FSI), says FSI supports the Red Tape Reduction Act, as the small businesses operated by FSI members “need relief from costly regulations. In addition, they want to see the SEC and CFTC succeed in their mission of protecting the financial markets and the public from fraud while fostering open, competitive and financially sound securities, futures and option markets.”