Rep. Spencer Bachus: A soft-spoken approach to a powerful House post

As the incoming chairman of the House Financial Services Committee, Rep. Spencer Bachus will step into an arena in which his mild Southern manner will be tested on both the left and the right, as well as by the financial services industry and consumer advocates.

After watching helplessly while the Democratic majority constructed the Dodd-Frank financial regulatory reform bill, Mr. Bachus, elevated to the chairmanship by the change in control of the House, now has the opportunity to try to shape its implementation.

“We are committed to going title by title through the 2,300-page Dodd-Frank Act to correct, replace or repeal the job-killing provisions that unnecessarily punish small businesses and community banks that did nothing to cause the financial crisis,” Mr. Bachus, R-Ala., said in a statement after House Republicans chose him to head the committee.

Among the issues that Mr. Bachus and his committee plan to steer their way is the possible transfer of adviser oversight responsibility from the Securities and Exchange Commission to a self-regulatory organization.

During House debate over the Dodd-Frank bill last year, Mr. Bachus, who opposed the bill, demonstrated an inclination to give the Financial Industry Regulatory Authority Inc. oversight of dually registered advisers, including affiliates of broker-dealers.

The SEC is studying the issue and must report to Congress by Jan. 21. If the report recommends creation of an SRO, Congress must authorize it.

It is less certain where Mr. Bachus, a former small-business owner and state legislator, falls on the issue of mandating a universal fiduciary duty for anyone who gives retail financial advice, a provision of Dodd-Frank met with opposition by some GOP members of the House-Senate conference committee.

“That’s one of the pieces of [Dodd-Frank] that could have unintended consequences,” said Rep. Randy Neugebauer of Texas, the deputy ranking Republican on the Financial Services Committee. “We want to make sure we do it right.”

Under the new law, the SEC must produce a study on the issue by Jan. 21; it has the option then of promulgating a regulation that would impose one standard of care on advisers and brokers.

Republicans will use their majority power to schedule hearings in which they’ll put heat on regulators charged with implementing Dodd-Frank, including SEC Chairman Mary Schapiro.

When Mr. Bachus is leading the questioning, he’s sure to do it in a characteristic understated way. In June, during the public portion of House-Senate negotiations over Dodd-Frank, Mr. Bachus never raised his voice. In fact, he barely modulated it.

In his soft Southern drawl, he expressed disappointment with the massive legislation on behalf of his GOP colleagues on the House financial panel. He often chided Democrats for leaving out of the bill a proposed overhaul of government-sponsored mortgage enterprises.

His low-key approach contrasted with the more colorful leadership displayed by the Financial Services panel’s chairman, Rep. Barney Frank, D-Mass.

Over the years, Mr. Bachus, 62, has taken criticism from members of his own party for not pushing back hard enough against Mr. Frank. In fact, analysis by the National Journal Almanac showed that he occasionally has gotten into trouble for being too willing to compromise with Democrats.

Mr. Bachus has overcome these reservations, however. After the GOP won control of the House in the November election, he survived a challenge from Rep. Ed Royce, R-Calif., to head the committee.

In fact, Mr. Bachus’ performance during the Dodd-Frank negotiations drew praise from the ranking Republicans on six Financial Services subcommittees, who supported his appointment as committee chairman.

Mr. Neugebauer credits Mr. Bachus for giving the subcommittee leaders latitude to help develop policy.

“He’s a delegator,” Mr. Neugebauer said. “He’s also very team-oriented.”

— Mark Schoeff Jr.