Financial Services Committee
Bachus: Democrats Cozy Up to Failed Regulators While Republicans Push to Streamline Regulation
WASHINGTON, Jul 30 -
- Financial Services Committee Ranking Member Spencer Bachus today said Democrat obstruction of efforts by House Republicans to streamline the financial regulatory structure in the Dodd-Frank Act is yet another failure of the majority to prevent a potential crisis. Earlier today, the International Monetary Fund released a report assessing the stability of the U.S. financial system, stating "the complexity of the U.S. supervisory system and the diffusion of powers across agencies undermined its efficiency, effectiveness, transparency, and accountability" and despite recent legislative efforts to address regulatory framework, "bolder action would have been preferable."
"The purpose of this so-called ‘Wall Street Reform' was to toughen enforcement and streamline regulation, not to cozy up to failed federal regulators," Bachus said. "Instead, the Democrats blocked the necessary reforms, leaving our failed regulatory patchwork essentially undisturbed while creating a massive new bureaucracy to dictate consumer choices and ration credit."
Yesterday on CNBC, Chairman Barney Frank stated what can only be considered the key reason why the Dodd-Frank Act expands the regulatory framework and rewards the failed regulators with more discretion. Chairman Frank: "[H]ere's what people forget. These are the regulators who helped us write these laws. Mary Schapiro at the SEC. Sheila Bair at the FDIC. There'll be a new economic -- new bank supervisor (inaudible) the comptroller of the currency (inaudible)... Gary Gensler at CFTC. They are going to be very energetic."
"And why did Democrats do nothing to bring order to our chaotic regulatory framework?" Bachus asked. "For the same reason they refuse to act on GSEs - it's too hard politically and they were simply unwilling to take on the entrenched industry and regulatory interests who prefer the failed status quo."
During the House-Senate conference, Republicans offered an amendment that tracked H.R. 3310, the first comprehensive financial reform bill introduced in Congress, which was offered by House Republicans in July 2009. The amendment would have consolidated the bank supervisory responsibilities of the Office of Thrift Supervision, Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, and the Federal Reserve into a new agency called the Financial Institutions Regulator (FIR). This consolidated regulatory structure would have streamlined the current convoluted and fragmented structure, while ensuring that safety-and-soundness regulation would be consistent with and complement consumer-protection regulation by keeping both within the same agency. The amendment was defeated on a straight party-line vote.