House Financial Committee Busy
The Staff of the House Financial Services Committee is extremely busy and doing a very good job of keeping its role in the legislative process transparent. A reasonable run down of current activity in financial regulation reform appears here. (You can even sign up to get email alerts.)
These bills are elaborate, complex and defy tidy characterization. All are likely to change, some significantly, as the legislative process grinds along. The Senate Banking Committee is unlikely to produce anything equivalent until well into November.
In general, however, together the House FSC’s work would make for sweeping change. The bills would:
(1) create three new federal agencies: a Federal Oversight Council, a Consumer Financial Protection Agency and an Office of Federal Insurance;
(2) considerably expand powers of the Securities Exchange Commission, including by subjecting rating agencies to considerable regulation and oversight by the SEC plus eliminate an exemption to the Investment Company Act of 1940 for private financial advisors.; and
(3) expand the mandate and powers of the Commodity Futures Trading Commission concerning regulation of derivative securities.
These pending Committee steps, of course, are in addition to bills the House passed earlier this year, including the summer’s Corporate and Financial Institution Compensation Fairness Act of 2009, embracing shareholder say on executive compensation to a certain extent.
At this link, you can access pending bills totaling just about 1,000 pages. Following is an additional breakdown:
Financial Stability Improvement Act of 2009 (draft 10/27) (253 pages) (would create a Financial Services Oversight Council with extensive authorities and duties)
Consumer Financial Protection Agency Act of 2009 (draft 9/25) (291 pages) (would create elaborate new independent federal agency, the CFPA, with broad regulatory powers, many taken away from the Federal Reserve) [summary here]
EXPANDED SEC POWERS
Enhanced Accountability and Transparency in Credit Rating Agencies Act of 2009 (draft 10/16) (37 pages) (would considerably expand SEC oversight of rating agencies and prescribe important aspects of their governance structures and policies and procedures) [ summary here]
Private Fund Investment Advisers Registration Act of 2009 (draft 10/16) (11 pages) (would eliminate private adviser exemption from Investment Company Act of 1940)
EXPANDED CFTC MANDATE AND REGULATIONS
OTC Derivatives Markets Act of 2009 (draft 10/2) (187 pages) (would expand authority of Commodity Futures Trading Commission over certain kinds of financial swap deals and prescribes specific clearing regulations and other regulation)[summary here]
With this kind of legislative energy, you can be sure another crisis like the one gripping us will never happen again! (But you can also be sure others will.)