Rep. Scott Garrett (R-NJ), Chairman of the Financial Services Subcommittee on Capital Markets and Government-Sponsored Enterprises, today introduced H.R. 2308, the SEC Regulatory Accountability Act.
Introduced in the House with 15 original cosponsors, the SEC Regulatory Accountability Act would require the Securities and Exchange Commission (SEC) to abide by President Obama's executive order that government agencies conduct robust cost-benefit analysis to ensure that the benefits of any rulemaking outweigh the costs, and that both new and existing regulations are accessible, consistent, written in plain language, and easy to understand. As an independent agency, the SEC is not required to follow the executive order. While SEC Chairman Mary Schapiro has indicated that she intends for the SEC to abide by the order, this legislation will codify that executive order and require her and future SEC Chairmen to abide by it.
Specifically, the SEC Regulatory Accountability Act requires the SEC to clearly identify the nature of the problem that a proposed regulation is designed to address, as well as assess the significance of that problem, before issuing a new rule. Additionally, the bill requires the SEC to utilize the Office of the Chief Economist to conduct the cost-benefit analysis of potential rules to ensure that the regulatory consequences on economic growth and job-creation are properly accounted for.
Garrett issued the following statement after introducing the bill in the House:
"In the wake of the 2008 financial crisis, Washington undertook a reexamination of how Wall Street operates and is regulated, which resulted in the unprecedented, over-reaching Dodd-Frank bill and its 300 new rules. While certain regulation is necessary, it's important to ensure that the cumulative amount of this rulemaking does not turn into a massive and unnecessary drag on economic growth.
"My bill would simply require the SEC to abide by President Obama's executive order that government agencies conduct a thorough analysis of the economic effects of both new and existing regulations to avoid creating unnecessary, burdensome rules that affect economic growth and job-creation. Because we need sound data and economic analysis underpinning our rulemaking, this legislation requires that the SEC utilize the Office of the Chief Economist to identify the nature and significance of the problem that the proposed rule seeks to address.
"This is a common-sense, pragmatic approach to our rulemaking process that should have been in place all along. With our economy still struggling through 28 consecutive months of unemployment above 8%, we need to ensure that we're making it easier, not harder, for businesses to begin hiring again."