SEC's longest-tenured Republican to retire in July, risking deadlock

SEC's longest-tenured Republican to retire in July, risking deadlock
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The longest-tenured Republican on the Securities and Exchange Commission (SEC) announced Monday that he will retire in July, creating a potential deadlock at the agency.

SEC Commissioner Michael Piwowar wrote in a Monday letter to President TrumpDonald John TrumpSchiff: Surveillance warrant docs show that Nunes memo 'misrepresented and distorted these applications' Chicago detention facility under investigation following allegations of abuse of migrant children Ex-Trump aide: Surveillance warrants are 'complete ignorance' and 'insanity' MORE that he will step down from the agency on July 7, which would leave two Republicans and two Democrats in control of the commission. 

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Piwowar said it was “an honor to serve the American people at such a respected agency and work with such dedicated and talented staff.” A former SEC economist, Piwowar was a staunch critic of the Dodd-Frank Act financial rules enacted after the 2007-8 financial crisis.

The news was first reported by The Wall Street Journal.

Piwowar joined the SEC in August 2013 after his nomination by President Obama. His five-year term expires on June 5, but SEC commissioners are allowed to extend their tenures for up to 18 months if the Senate hasn’t confirmed their successor.

Piwowar’s departure could hinder the SEC’s efforts under Chairman Jay Clayton (R) to loosen rules on financial advisers and companies seeking to go to public.

The SEC currently has a slight majority of Republican commissioners with Clayton, Piwowar and Hester Peirce. The empty Republican seat would give Democratic commissioners Kara Stein and Robert Jackson power to block proposals that would roll back key Dodd-Frank rules or ease disclosure requirements for firms.

Piwowar served as acting SEC chairman from Trump’s inauguration through Clayton’s swearing-in last May. During his brief but controversial tenure, Piwowar ordered SEC employees to halt work on two polarizing Dodd-Frank rules and railed against a pantheon of regulations he said were hindering average investors.

Senate Democrats called for an investigation into Piwowar's use of the acting chairmanship to target Dodd-Frank, arguing he could have violated federal policies and wasted agency resources.

Piwowar’s retirement is just the latest staffing setback for the SEC. The agency lacked a full roster of five commissioners from 2013 until Peirce and Jackson were sworn in in January.

The White House will be forced to consider a replacement for Piwowar amid other vacancies at federal financial agencies. Trump has not yet nominated a full-time director for the Consumer Financial Protection Bureau, vice chairman of the Federal Deposit Insurance Corporation or president of the Export-Import Bank.