House Republicans are beginning to move legislation that would roll back parts of the Dodd-Frank financial reform law to the detriment of investors, according to Mark Schoeff Jr.’s InvestmentNews article entitled “Sen. Durbin says Dodd-Frank rollback would kneecap regulators.” As the title suggests, Sen. Dick Durbin, assistant majority leader, indicated that he will fight efforts to scuttle or delay implementation, because slowing down Dodd-Frank would make the country vulnerable to another financial crisis.
“We’ve got to push ahead on this law,” Mr. Durbin was quoted as saying to the Senate Appropriations Subcommittee on Financial Services and General Government, which he chairs.
Pursuant to Dodd-Frank, the Securities and Exchange Commission received a $74 million increase in its $1.18 billion funding level through September, but that is still far less than the SEC says that it needed for this fiscal year to implement Dodd-Frank.
Making matters worse, the House Republican majority recently approved a proposed budget 2012 that would put the SEC budget at $906 million, a $212 million cut from fiscal 2010.
SEC Chairman Mary Schapiro has again warned the Senate that the proposed cut would force the SEC to cut its 3,800-member staff by about 1,000, forgo critical information technology improvements, significantly reduce the number of investment adviser examinations it performs significantly, and bring fewer enforcement cases.
“We oversee financial firms that spend more on their technology operations than the SEC spends on its entire budget,” Ms. Schapiro pointedly testified.
The proposed cuts come amid well-publicized efforts by Wall Street firms and their lobbyists to roll back Dodd-Frank and promote the continuation of business as usual. See, for example, the recent Wall Street Journal article by Victoria McGrane entitled “Wall Street, Banks Press to Shape Dodd-Frank Rules,” citing the WSJ’s review of recently released lobbying disclosure documents.
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