Republican promises to revisit the financial reform law aren’t fazing Securities and Exchange Commission Chairman Mary Schapiro.
“We’ve worked extremely well with Democrats and Republicans over the last few years, and we’re a bipartisan commission,” Ms. Schapiro said after appearing at the Securities Industry and Financial Markets Association’s annual meeting in New York on Monday. “I’m not worried about our ability to work with Congress going forward. We’re very committed to continuing to have an incredibly constructive relationship.”
In last week’s election, the GOP gained at least 60 House seats to achieve control of the chamber when a new Congress begins in January. The party also added six members to its Senate caucus, giving it much more leverage even though Democrats maintained their majority on that side of the Capitol.
Although health care reform drew vows of repeal from Republicans running for office this fall, the party also was critical of the Dodd-Frank financial measure. It drew only three GOP votes when it passed the House in June.
“It is a terrible piece of legislation,” Senate Minority Leader Mitch McConnell, R-Ky., said in a speech in Washington last week. “We’ll be looking at it and trying to figure out how we can improve it.”
The GOP review comes as the SEC races to complete more than 100 regulations and 20 studies assigned to it by the bill. Complicating the agency’s task is that Congress has not approved a federal budget for fiscal year 2011, which means that the SEC is operating at its fiscal year 2010 funding level.
In testimony before Congress this year, Ms. Schapiro said that the agency needs to hire 800 new staff members to implement Dodd-Frank, which includes a provision to double the SEC’s budget to $2.25 billion by 2015. But the first tranche of that increase is caught up in the Capitol Hill budget wrangling.
Funding relief is not assured, as Republicans have made government spending reductions a top priority, reflecting the fact that voter unrest over the burgeoning federal deficit helped propel the party’s electoral gains.
Ms. Shapiro expressed equanimity about the budget situation.
“We’ll see how the budget issue resolves itself over time,” Ms. Schapiro said. “It’s too soon to predict.”
But it’s not too early to forecast that Republicans will try to influence Dodd-Frank implementation.
“It makes a slow process go slower,” said Thomas Paprocki, chief executive officer of The Ziegler Cos. Inc., an independent broker-dealer. “It’s a re-scrutinization.”
The financial industry itself came under scrutiny during the last campaign.
Cornell Belcher, president of brilliant corners Research and Strategies, told attendees at the SIFMA conference that voters consider Wall Street more culpable for the faltering economy than President Barack Obama or former President George W. Bush.
“We are in the middle of the bull’s-eye because Americans are galvanizing around blaming us,” Mr. Belcher said of the financial services sector.
A top executive also noted discontent toward financial companies.
Chet Helck, chief operating officer at
Raymond James Financial Inc., said that investor focus groups he’s observed expressed confidence in their personal investment advisers, while “throwing rocks at the industry … for helping to fuel the [financial] crisis.”
