Republican lawmakers told the top U.S. securities regulator on Tuesday they are concerned her agency will rush out new rules in the final weeks that President Barack Obama, a Democrat, holds the Oval Office.
The chair of the House Financial Services Committee, Jeb Hensarling, who has been mentioned as a possible Treasury secretary under Republican President-elect Donald Trump, said “whenever there is a transfer of power from one presidential administration to another, there is a temptation for federal agencies to rush pending rulemakings to completion, as a way of cementing the policy priorities of the outgoing administration.”
“I would strongly urge you to respect the results of last week’s election and resist the temptation to finalize any regulations, including Dodd-Frank … regulations,” added Hensarling during a hearing on the Securities and Exchange Commission.
SEC Chair Mary Jo White was the hearing’s sole witness. On Monday she announced she will leave her post when Obama’s term ends in January, a decision made before Trump’s stunning election win.
She told the committee firmly there would be no surprise rulemakings or ramming pending rules through to completion.
“I don’t see any last-minute rushes. I do intend to carry out the agenda I outlined in February 2016 as much as I can,” she said.
“I don’t think any rulemaking benefits from it being rushed. It’s hard to do it right,” she also said.
Nonetheless, White would not commit when asked about a proposed multi-agency rule for clawing back compensation from executives who have committed wrongdoing.
The SEC and fellow major financial regulators must approve the rule for it to become final, and the lawmakers pressed White to not bring it up for a commission vote while she is still chair.
White said she could not predict what will happen in the next 2-1/2 months, or what will be included in the final draft of the rule.
To continue carrying out its agenda announced earlier this year, the SEC will focus on capital segregation rules, an outstanding derivatives rule, and a staff recommendation on mutual fund disclosure, White said.
The 2010 Dodd-Frank Wall Street Reform law is considered one of Obama’s signature domestic achievements, and federal agencies have furiously put in place new regulations and systems to carry out its many moving parts.
Trump has said he would repeal parts of the law, and he is expected to use legislation Hensarling drafted as a blueprint for his plans.
Only half a dozen Democrats attended Tuesday’s hearing, primarily asking about corporate board diversity and the Wells Fargo ghost account scandal, or blasting Trump.
White, an independent, has been criticized by both parties. Democrat Senator Elizabeth Warren recently called on Obama to fire her, and progressives say she slowed down implementing Dodd-Frank.
White said the SEC has completed 80 percent of the rulemakings required by Dodd-Frank. She added that she would not want to see parts of the law, including the Volcker rule restricting banks from making speculative investments, rescinded in the future.
(Reporting by Lisa Lambert)