The Financial Services Committee will meet on Thursday to consider a package of bills aimed at removing government barriers to job creation and economic growth.
Under Chairman Spencer Bachus’ leadership, the Committee has led efforts to reduce regulatory barriers that hinder small businesses’ access to the capital markets. Since the beginning of 2011, the Committee has approved 21 jobs bills.
“Outdated and burdensome regulations serve as a roadblock to our economic recovery and a barrier to new jobs. These bills provide job creators with greater economic certainty and increase access to capital, which is a necessary ingredient to the creation of jobs,” said Chairman Bachus.
The Committee’s markup of four bills is scheduled to begin at 10 a.m. on Thursday in room 2128 Rayburn. During the mark up, the Committee will consider the following:
H.R. 3871, the Proprietary Information Protection Act, introduced by Rep. Bill Huizenga. The legislation fixes an omission in the Dodd-Frank Act that opens the door for third parties to obtain privileged information provided by financial institutions to the Consumer Financial Protection Bureau (CFPB). The bill requires the CFPB to preserve the confidentiality of privileged information it receives from financial institutions, as other banking regulators do. Richard Cordray, Director of the CFPB appointed by President Barack Obama, recently testified that this was an "oversight" and that he supports a legislative solution to ensure privileged information is not leaked to third parties through the CFPB.
H.R. 2308, the SEC Regulatory Accountability Act, introduced by Rep. Scott Garrett. H.R. 2308 directs the Securities and Exchange Commission (SEC) to conduct thorough cost-benefit analyses of its regulations and proposed rules. Under the legislation, the SEC must ensure the benefits of its regulations outweigh the costs. In a testament to how much H.R. 2308 is needed, a federal appeals court unanimously overturned one of the SEC’s Dodd-Frank rules last year because the court found the agency failed to properly conduct a cost-benefit analysis. In January, David Kotz, the outgoing inspector general of the SEC, criticized how the agency analyzes the economic impact of some of its Dodd-Frank rules.
While President Obama issued an executive order last year directing Federal agencies to conduct cost-benefit analyses of their regulations and future rulemaking, he exempted independent agencies such as the SEC as well rules implementing Obama’s government take-over of health care.
H.R. 1838, the Swaps Bailout Prevention Act, introduced by Rep. Nan Hayworth. This legislation repeals a provision in the Dodd-Frank Act that increases systemic risk to the financial system by forcing derivatives trading units from regulated financial institutions into new entities that may be outside the purview of financial regulators. When Congress was crafting the Dodd-Frank Act, financial regulators raised concerns about the risk involved with this provision. Then-FDIC Chairman Sheila Bair said that “if all derivatives market making activities were moved outside of bank holding companies, most of the activity would no doubt continue, but in less-regulated and more highly leveraged venues.”
H.R. 1838 ensures derivatives trading units can be overseen by financial regulators and increases the capital available to finance job creation and economic activity.
H.R. 3606, the Reopening American Capital Markets to Emerging Growth Companies Act of 2011, introduced by Reps. Stephen Fincher and John Carney. The legislation seeks to promote American job creation and further economic growth by making it easier for more companies to access capital markets and by reducing the cost of going public for small and medium size companies. H.R. 3606 creates a new category of issuers, called an “Emerging Growth Company” (EGC). SEC regulations for an Emerging Growth Company will be phased in over a period of five years or until the company becomes large enough to afford the regulatory costs traditionally associated with going public. This temporary reprieve from costly regulations will allow smaller companies to go public sooner in their life cycle, which directly leads to job creation within the company. Importantly, the bill applies scaled regulations for EGCs without compromising core investor protections or disclosures.
