Senate Banking Committee Republicans worry Securities and Exchange Commission chairman Mary Schapiro and other regulators are rushing to implement rules mandated by the Dodd-Frank Act without sufficient regard to cost-benefit analyses or public comments.
“We are concerned that regulators are not allowing adequate time for meaningful public comment on their proposed rules,” Richard Shelby, R-Ala., the ranking minority member, and the committee’s nine other Republicans wrote in a three-page letter sent Wednesday to six regulators.
“We also believe that regulators are not conducting rigorous analyses of the costs and benefits of their rules and the effects those rules could have on the economy,” they said. “The potential harm to our already weak economy and the public from ill-conceived rules cannot be underestimated.”
The letter was sent the day before the committee is to hold a hearing on the progress regulators are making in implementing provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act six months after it was enacted.
In their letter, the Republicans said that a review by the committee’s capital markets panel found comment periods for rules implementing the act are just over 40 days, substantially shorter than the 60-day minimum comment period generally required by the Office of Management and Budget.
The complaint on timing for comments does not appear to be applicable to the SEC’s proposed rules for a permanent registration system for muni advisers. Those rules were proposed Dec. 20 and public comments must be submitted by Feb. 22.
The Republicans also said that some industry groups are challenging the regulators’ cost-benefit analyses for certain rules.
The lawmakers asked the regulators to ensure the rules they adopt to implement Dodd-Frank are the least burdensome way to achieve the statutory mandate and to provide documentation for meeting cost-benefit analyses and other requirements.
They also asked the agencies what steps they are taking to coordinate over certain rules.
The SEC and Commodity Futures Trading Commission, for example, have split jurisdiction over derivatives and are coordinating on separate sets of rules.
The lawmakers asked the regulators if they need additional time to implement rules under Dodd-Frank, “given the importance of rigorous cost-benefit and economic impact analyses and the need for due consideration of public comments.”