As expected, Rep. Jeb Hensarling, R-Texas, was elected Wednesday as Chairman of the House Financial Services Committee for the 113th Congress.
Hensarling will take over the reins in January, replacing Rep. Spencer Bachus, R-Ala., who had to step down due to term limits.
While industry officials say Hensarling isn’t too keen on the bill Bachus introduced this year calling for a self-regulatory organization for advisors, Karen Nystrom, head of public policy and advocacy for the National Association of Personal Financial Advisors (NAPFA), said recently that the Financial Planning Coalition is still maneuvering to thwart passage of any SRO bill next year. Nystrom said that the Coalition wants to ensure a “bipartisan bill” originates in the Senate allowing the SEC to collect user fees from advisors to fund their exams “as it has a better chance of passing in the House.”
Said Nystrom: “We need a bipartisan bill in the Senate to get any traction on [beating] the SRO legislation. We need to advocate for legislation that keeps us with an open, transparent body” like the SEC. “We’ve heard rumors that [Hensarling] is not wild about” Bachus’ SRO bill, Nystrom said. “But one never knows.”
Neil Simon, vice president for Government Relations at the Investment Adviser Association in Washington, told AdvisorOne that Hensarling will focus on “issues of clear national importance, including reform of Fannie Mae and Freddie Mac and reform of certain aspects of the Dodd-Frank Act.”
Simon said that IAA “will remain active on Capitol Hill to counter FINRA’s continuing effort to become advisors’ SRO,” but the SRO issue ”is not a priority for Hensarling and it’s unlikely that the House Financial Services Committee will give it much attention early in the next Congress.”
In a statement issued after he was elected, Hensarling signaled where he will focus his attention. “I am grateful for the opportunity to lead this committee, and I look forward to working alongside my colleagues to foster the deepest, most liquid, competitive, efficient, innovative, and transparent capital markets the world has ever known,” he said.
To do this, he continued, “We must end the phenomenon of ‘too big to fail’ and reinstate market discipline. We must also reduce taxpayer risk in the marketplace and cut the sheer weight, volume, complexity, and uncertainty of the federal red tape burden that makes capital more expensive and less available. When we do, we can revive and strengthen the free enterprise system—the best housing and jobs program known to man.”