One of the staunchest critics of the Dodd-Frank Act says a full repeal of the financial reform law isn't in the cards.
Rep. Scott Garrett (R-N.J.) said legislation to strike down the law, now pending in the House and the Senate, won’t pass.
“That ain’t gonna happen,” he said Thursday night during remarks at a Hedge Fund Association symposium on forthcoming financial regulations.
He said a piecemeal legislative approach and an engagement with regulators still crafting dozens of Dodd-Frank rules could be an effective way to improve the law, which was panned by conservatives and the financial services industry.
Garrett pointed to this week’s House approval of a bill he introduced, targeting regulations now being crafted by the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC).
The two agencies are working separately on regulations meant to oversee the massive international derivatives market. However, Garrett said the two agencies appear to be going in separate directions – and the CFTC was considering adopting the changes through “guidance” rather than a formal rule-making process. Garrett’s bill, which won more than 300 votes and more 70 from Democrats, would force the agencies to jointly issue a single rule.
“There will be more bills like that,” said Garrett, chairman of the Financial Services subcommittee on Capital Markets and Government Sponsored Enterprises.
Garrett said he was optimistic that the SEC's new chairman, Mary Jo White, would operate in an open, bipartisan manner, but he said the agency’s priorities were out of order.
He railed against SEC rulemaking proposals to force companies to check whether minerals they use are funding warlords in the Democratic Republic of Congo and require corporations to disclose their campaign giving to shareholders.
Garrett said those efforts are outside of the SEC’s traditional jurisdiction and called the latter initiative an attempt to “shame businesses,” while stepping on their right to free speech.
“We have some concerns that this continues to be a priority of the SEC,” he said.
Meanwhile, Garrett chided the agency for its delays in implanting the year-old JOBS Act, which requires a set of new rules meant to help startup companies raise money. He said he and other lawmakers were already moving forward with a “JOBS Act 2.0,” additional legislation that would aid firms in capital formation.