Happy Birthday, Part II - Top Regulators Make Case for Funding Increases
The nation’s leading financial regulators took their battle for more implementation and enforcement funding to Capitol Hill Thursday. Their testimony was offered on the first anniversary of the signing of the Dodd-Frank Act.The witness panel at the Senate Banking Committee consisted of Rep. Barney Frank (D-MA), for whom the Act was named; Deputy Treasury Secretary Neal Wolin; Federal Reserve Chairman Ben Bernanke; Securities and Exchange Commission Chairman Mary Shapiro; Commodity Futures Trading Commission Chairman Gary Gensler; Federal Deposit Insurance Commission Acting Chairman Martin Gruenberg; and Acting Comptroller of the Currency John Walsh. Not represented was the agency whose funding is most controversial – the Consumer Financial Protection Bureau. The CFPB opened its doors for business today.
The witnesses met with the mixed response they must have expected . Senate Banking Committee Chairman Tim Johnson (D-SD) opened the hearing by applauding the regulators for their work over the past year and emphasized that “Congress must do its part” to actively oversee the implementation of Dodd-Frank in the years to come. Ranking Member Richard Shelby (R-AL), on the other hand, expressed his frustration with the law, saying that it “provides little comfort to millions of Americans who are facing harsh economic realities.” Sen. Shelby went on to say that when Dodd-Frank was being considered in the Senate the-Senator Chris Dodd (D-CT), for whom the bill is also named, assured him that there would be strong oversight and accountability in the regulatory agencies. Shelby said he regrets that that hasn’t been the case.
Each of the regulators devoted his or her testimony to justifying the regulatory delays and petitioning for increased funding from Congress. Gensler said that regulations have been delayed because “It is more important to get it right, than to work against the clock.” Shapiro argued that the regulators cannot possibly fulfill all of their new responsibilities without increased resources.
Regulatory agencies have taken a hit in House Republicans’ latest attacks on Dodd-Frank. The House Financial Services Appropriations bill slashed several regulators’ budgets to levels at or below their pre-Dodd-Frank budgets, when they had far fewer responsibilities. Frank criticized the cuts during his testimony, saying that Congress can’t argue that it can’t afford to fund regulatory agencies when it continues to spend billions of dollars in overseas conflicts. It should be noted, the Senate Banking Committee is not the venue to battle the funding cuts suggested by the House Appropriations Committee. The Senate Appropriations Committee will take up the spending plan for most of these agencies later this year.
