Friday, June 29, 2012

President Issues Veto Message on House SEC Funding Legislation


President Obama said that he would veto House legislation funding the SEC  $245 million below his FY 2013 Budget request, including a provision preventing obligation of funds from the Commission's non-appropriated Reserve Fund. 

More generally, said the President, HR 6020 would severely undermine key investments in financial oversight and implementation of Wall Street reform to protect American consumers, as well as needed tax enforcement and taxpayer services. Taken together with onerous mandated increases in information technology in excess of requested amounts, said the Statement of Administration Policy, The Financial Services and General Government Appropriations Act, HR 3060, would require the SEC to reduce staff that polices the US securities markets and enforces the federal securities laws, thereby threatening the stability of the financial markets. Similar to its position on SEC funding, the Administration strongly opposes the bill's reduction in funding from the FY 2013 Budget request for the IRS. HR 2060 has been approved by the House Appropriations Committee. 

The Statement of Policy noted that Sections 501 and 502 of the Act would terminate Federal Reserve transfers to fund CFPB and subject the agency to the annual appropriations process beginning in FY 2014.  The provision would shred the necessary independence of CFPB set in statute, in the President’s view, and would increase the likelihood of underfunding the Bureau, reducing consumer protection in the financial services marketplace. 

In addition, Sections 120, 203, and 503 place additional reporting requirements on the Office of Financial Research, OMB, and CFPB, respectively, that are duplicative of existing reporting requirements and costly to produce.

Under Section 503, the CFPB must submit a report to Congress detailing the obligations made during the previous quarter by object class, office and activity and the estimated obligations made during the previous quarter by object, class and activity. Similarly, Section 120 requires the Office of Financial Stability and the Office of Financial Research to submit quarterly reports to Congress on the obligations made during the previous quarter by object class, office and activity and the estimated obligations made during the previous quarter by object, class and activity. Section 203 requires the OMB to report to Congress on the cost of implementing the Dodd-Frank Act.

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