Support growing for removing FOIA exemption for SEC

A top House Democrat unveiled legislation Tuesday to strike from the recent financial overhaul broad powers for the Securities and Exchange Commission (SEC) to withhold information from Freedom of Information Act (FOIA) requests.

Rep. Edolphus Towns (D-N.Y.), chairman of the House Committee on Oversight and Government Reform, introduced legislation to limit the SEC's new power to withhold information it obtains from financial firms as part of “surveillance, risk assessments, or other regulatory and oversight activities.”

The exemption has been heavily criticized by some Democrats and Republicans, as well as consumer advocacy groups. Support appears to be growing in the House and Senate for legislation to overhaul the section of the financial bill signed into law in July.

The Towns bill is a companion to legislation introduced last week by Sens. Patrick Leahy (D-Vt.), John Cornyn (R-Texas), Ted Kaufman (D-Del.) and Chuck Grassley (R-Iowa). House Financial Services Committee Chairman Barney Frank (D-Mass.) has scheduled a September hearing on the issue to give lawmakers time to pass legislation if necessary before the full force of the financial overhaul takes effect.

Senate Banking Committee Chairman Chris Dodd (D-Conn.) told reporters last week that he was not concerned by the section of the bill.

Mary Schapiro, SEC chairwoman, said last week that the language does not give the commission a "blanket" exemption.