Ranking Member Waters' Floor Statement on H.R. 1062 “SEC Regulatory Accountability Act”
I rise to strongly oppose HR 1062. This bill places significant additional requirements for economic analysis by the Securities and Exchange Commission (SEC), effectively bringing any efforts at rulemaking to a standstill.
Let's be clear: the purpose of this legislative effort is to stop implementation of the Dodd-Frank Wall Street Reform and Consumer Protect Act dead in its tracks. After losing in Congress, the fight against the Dodd-Frank Act moved to the courts, beginning with overturning the proxy access rules they adopted under authority provided by that Act. Although I agreed fully with the SEC's position, a court found that the SEC did not meet its already significant requirements to conduct an economic analysis.
After the proxy access case was overturned, the SEC adopted improved standards for conducting cost-benefit analyses. These procedures were cited by the GAO last December as having all the elements of good regulatory analysis. Basically what the GAO is saying, we took a look we studied it and they do a good job.
Nonetheless, the bill before us today adds even more requirements, tying up SEC resources and putting it at even greater risk of litigation for every rule. Despite the assurances of my Republican colleagues that they are only applying the terms of an executive order to the SEC, that executive order explicitly protects agencies from lawsuits based on their economic analysis. HR 1062 has no such protection for the SEC.
The Commission is undertaking a valiant effort to finish the Dodd-Frank and JOBS Act rules, even in the face of attempts by the majority to restrict their funding. As the SEC attempts to balance capital formation with the need to protect investors, this bill weights the scales heavily in favor of industry over investors. In fact, the words "investor protection" do not appear anywhere in this bill. Even without this bill, we can count on industry lobbyists to sue the SEC any time it sees a weakness in the justification supporting a rule, as they have in several other cases currently before the courts.
And this bill does not apply only to new rules. This is extraordinary, and I want to say this so everybody understands. This bill would require the Commission to review every rulemaking ever issued – even those that have protected our securities markets since the Great Depression – one year after the adoption of this bill, and every 5 years thereafter. As a result, the Commission will be forced to divert resources away from other key areas, such as enforcement. This comes at a time when House Republicans want to hold SEC funding flat, despite the SEC's new responsibilities, the increase in the number of participants it oversees, and the growth of complexity and size of US securities markets.
It is ironic that, as House Republicans push this bill forward, they also are calling for the SEC to speed up its efforts on JOBS Act rules. This bill makes it impossible for the SEC to meet the very deadline we adopted just two days ago when we passed HR 701. I urge my colleagues to oppose HR 1062.