Thursday, June 16, 2011

House Financial Services Appropriations Bill Would Eliminate SEC Reserve Fund

The House Appropriations Committee FY 2012 financial services bill includes $1.2 billion for the SEC, which is equal to last year’s level and $222 million below the President’s request. The legislation also includes a prohibition on funding for the new SEC reserve fund, which the Committee feels would in effect operate as a slush fund for the SEC for programs that have not been approved by Congress.
Section 991 of the Dodd-Frank Act created the SEC Reserve Fund, which is a separate fund established in the Treasury from which the Commission may obligate amounts up to $100 million in any one fiscal year that it determines are necessary to carry out its functions. The Reserve Fund provisions take effect on October 1, 2011. The Reserve Fund is financed by deposits from registration fees collected by the Commission.

The draft, in Section 626, directs the SEC and other agencies to provide congressional appropriators with a quarterly accounting of the cumulative balances of any unobligated funds that were received by the agency during any previous fiscal year. Also, under Section 627, the SEC must report, within 180 days of enactment, to Congress on increasing public participation in the rulemaking process and reducing uncertainty; improving coordination with other Federal agencies to eliminate redundant, inconsistent, and overlapping regulations; and identifying existing regulations that have been reviewed and determined to be outmoded, ineffective, or excessively burdensome.

In addition, the legislation would limit mandatory funds for the Bureau of Consumer Financial Protection $200 million. The Committee said that the Bureau, created Dodd-Frank, has not yet been fully constituted and many questions remain as to its authority and mission. The legislation would also subject the Bureau to annual appropriations starting in 2013, noted the Committee, to increase annual oversight and make the agency more transparent and accountable to the taxpayer.

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