By: Michelle Patana
A number of federal financial regulatory agencies are voicing their opposition to a bipartisan bill that seeks to limit the scope of their authority over new rules and reforms.
The bill, entitled the Independent Agency Regulatory Analysis Act, would enable the President to require that all independent agencies to take up to 13 additional steps before proposing any rules or regulations, including the costs and benefits of suggested reforms. Agencies argue that the legislation would not only give the President too much power and discretion over the agencies' actions, but also inhibit them from objectively doing their jobs and fulfilling their role of protecting consumers from abusive practices.
In response, agency leaders signed a letter opposing the reform, and included signatures from Federal Reserve Board chairman Ben Bernanke, Securities and Exchange Commission chairman Mary Schapiro, Comptroller of the Currency Thomas Curry, Federal Deposit Insurance Corp. acting chairman Martin Gruenberg, Consumer Financial Protection Bureau director Richard Cordray and National Credit Union Administration chairman Debbie Matz.
"This would give any president unprecedented authority to influence the policy and rulemaking functions of independent regulatory agencies and would constitute a fundamental change in the role of independent regulatory agencies," the officials said in an October 26 letter to the two senators sponsoring the bill. "Beyond injecting an Administration's influence directly into our rulemaking, the bill would also interfere with our ability to promulgate rules critical to our missions in a timely manner."
The Federal Reserve would largely be exempt from certain provisions of the legislation, but the lawmakers have not explained how far the exemption would extend, according to American Banker.
Consumer groups also chime in regarding new regulations
Financial agencies are not the only entities that oppose the bill, and some consumer groups - including the National Consumer Law Center and the Center for Responsible Lending - have also found fault with the proposed rule. Opponents note that the requirements, namely the cost-benefit analysis rule, are redundant and time-consuming, which may inhibit consumers from receiving the timely protection they need.
Many of the groups that would be affected have made significant strides in curbing big banking practices that weigh heavily on consumers, forcing many institutions to change their banking strategies. Some opponents feel that if regulatory agencies are restricted from performing their duties, it may lead to a return of poor Wall Street policies.