Patrick McHenryChairman

Today, the House Financial Services Subcommittee on Oversight and Investigations, led by Chairman Bill Huizenga (MI-04), is holding a field hearing entitled “Victims of Regulatory Overreach: How the SEC’s Climate Disclosure Rule Will Harm Americans.”

Watch Chairman Huizenga’s opening remarks here.

Read Chairman Huizenga’s opening remarks as prepared for delivery:

“Today’s hearing has been two years in the making. 

“In a rush to appease the left, Gary Gensler, the chair of the Securities and Exchange Commission (SEC) proposed a nearly 500-page climate-disclosure rule in 2022, which, by the SEC’s own estimation, would cost companies billions of dollars to comply.

“And how did Chair Gensler respond? He doubled down.

“Chair Gensler ignored the warning from the Supreme Court, which ruled in West Virginia v. EPA that the EPA exceeded its statutory authority, relying on ambiguity as constituting an implicit delegation from Congress.

“Chair Gensler ignored the warning from Fifth Circuit Federal Court of Appeals, which ruled against a separate SEC finalized rule about share repurchase disclosure.  

“In that opinion, the court rightfully held that the ‘the SEC acted arbitrarily and capriciously, in violation of the Administrative Procedure Act, when it failed to respond to petitioners’ comments and failed to conduct proper cost-benefit analysis.’

“And finally, Chair Gensler ignored his own inspector general, who concluded that the SEC faced serious management and performance challenges, raising significant concerns that the agency was attempting to enact too many rules, too quickly.

“He has finalized nearly three dozen rules, with more than 20 remaining to be finalized.

“The fast-paced rulemaking over the last two years has raised serious questions about how important Chair Gensler views the internal economic analysis conducted by his agency.

“Last year, this subcommittee launched an investigation into the climate rule and the SEC’s process to propose and finalize the rule. 

“We have requested documents, conducted transcribed interviews of current SEC staff, and held multiple hearings about the SEC’s work on this rule. 

“In response to the committee’s request, the SEC has flooded committee staff with tens of thousands of pages of unresponsive documents and very few answers.

“Given this lack of cooperation and the content of the material turned over to the committee, I can only conclude that Chair Gensler does not want us to see the flimsy basis on which he has crafted this rule.

“Additionally, the SEC’s climate disclosure rule blatantly undermines the Commission’s existing materiality standard.

“Under the principles-based materiality standard, a company must disclose information to prospective investors and shareholders so that they can make informed investment decisions.

“The SEC should not statutorily redefine the materiality standard to prescribe climate related disclosures for all public companies, even when a reasonable investor would not find such information important to their investment and voting decisions.

“On Friday, just 9 days after the SEC finalized the climate-disclosure rule, judges of the 5th U.S. Circuit Court of Appeals granted a temporary stay. 

“The Court’s decision signals the SEC’s authority to develop, finalize, and implement a climate disclosure rule is in jeopardy.

“Let me conclude with this.

“In the two years since the climate disclosure rule was proposed, we have witnessed an unprecedented assault on our capital markets.

“The Commission finalized the climate rule despite no clear congressional authorization.

“Although Chair Gensler has repeatedly reminded the public that he is not a ‘climate regulator,’ under his leadership, the SEC has strayed far from its clear statutory mission.

“Investors should know that the SEC’s overreach will significantly hurt our economy while serving as a boon for special interest groups and far-left activists.

“Unless he radically alters this approach to our capital markets, Gary Gensler’s legacy will be of an overzealous bureaucrat who was repeatedly reined in by the courts. 

“I want to personally thank the members of our committee, who traveled from their districts, to be with us here this morning.

“To the witnesses, thank you! I commend your willingness to be with us this morning.

“Unfortunately, many stakeholders were too nervous to testify and speak out against the rule due to a genuine fear of retaliation by the SEC. In the era of Gary Gensler, I guess it’s not that surprising. 

“I look forward to hearing from you and with that, I yield back the balance of my time.”