After promising during the campaign to “get rid of Dodd-Frank,” President-elect Donald Trump has named a fellow critic of the post-financial crisis law to lead the transition team’s review of independent financial agencies.
Paul Atkins, a former Securities and Exchange Commissioner under President George W. Bush, served for six years on the top markets cop. He left the agency in 2008 and is now the chief executive of the financial and regulatory consulting firm Patomak Global Partners.
Bill Walton, chairman of the private equity firm Rappahannock Ventures, and David Malpass, a former chief economist for Bear Stearns, are heading the Trump transition team on economic issues. In 2010, Malpass ran as a Republican in New York’s special election to replace Hillary Clinton in the Senate, losing in the primary.
Atkins didn’t respond to a request for comment from The National Law Journal. But his past statements and votes provide some picture of his approach to financial regulation and how he might seek to shape the SEC.
Beyond general calls to dismantle Dodd-Frank, Trump did not clearly articulate enforcement and policy positions for financial markets. But Atkins has given detailed—and oftentimes harsh—critiques of the financial reform law, taking swipes at everything from the heft of its rulemaking burden to the framework of the whistleblower program.
Testifying before the Senate banking committee in 2011, Atkins called the Dodd-Frank law a rushed “calamity” that would breed uncertainty without directly addressing the causes of the financial crisis.
“It is my belief that a major cause of the uncertainty handcuffing our economy today is in fact government policy, particularly the sweeping new financial law enacted last year ostensibly for the sake of market stability and investor confidence,” Atkins said. “Because many of the provisions were not directly related to the underpinnings of the financial crisis, investors ultimately will pay for the increased costs associated with the mandates without receiving commensurate benefits.”
Atkins added: “That is the single tragedy of Dodd-Frank.”
Only three of the five commissioner seats are currently filled at the SEC. And with the current chairwoman, Mary Jo White, likely stepping down early next year, Trump will have an early opportunity to fill three posts.
In October 2015, President Barack Obama nominated Lisa Fairfax, a Democrat, and Hester Peirce, a Republican, to fill those seats. But their confirmations have been held up by Democrats on the Senate banking committee who have declined to take a position on a proposal to require corporations to disclose their political spending. U.S. Sen. Chuck Schumer, a New York Democrat in line to become Senate minority leader, said the two nominees are “fence-sitting.”
Atkins’ role on the Trump transition team, combined with Republicans holding onto the Senate, does not bode well for Democrats pushing the political disclosure rule. In 2013, Atkins came out against the proposal in an op-ed for Politico, writing that the rule would not only “be bad policy, but huge majorities of shareholders routinely refuse to support mandatory disclosure of this legally protected corporate information.”
“Such a rule would be yet another questionable regulation from Washington designed to serve the narrow political objectives of a few at the expense of general shareholder interests,” he wrote.
On his lessons learned at the SEC, Atkins said this was the biggest: “The most important lesson—and one that is worth reminding ourselves of at a time like this—is that our capital markets are resilient.”
And a second lesson: “We ought not devise regulatory solutions before we have identified the problems,” Atkins said in remarks in 2008 that pointed to “Regulation National Market System,” or NMS, which was aimed at ensuring stock orders are made at the best-available price.
Atkins and Commissioner Cynthia Glassman dissented in that rule, saying in 2005 that it would have a “detrimental impact on competition and innovation” and cause regulatory uncertainty.
“Regulation NMS has taught us just how costly regulatory solutions to nonexistent problems can be,” Atkins said.