By Bill Flook
House Financial Services Committee Chair Maxine Waters and Sen. Sherrod Brown, the top Democrat on the Senate Banking Committee, are both urging financial regulators to halt all rulemaking not directly related to responding to the COVID-19 pandemic.
Brown, in a March 17, 2020, letter to the SEC, asked the commission to “focus and prioritize actions on activities related to the economic risks posed to markets and capital formation.”
And Waters on March 18 announced the committee’s broad policy plan to counter the economic fallout of the pandemic, in which “federal financial regulators would be prohibited from adopting rules not directly related to responding to the coronavirus for the length of the crisis.”
The Democratic memos come as the SEC and other regulators are seeking to maintain orderly markets and protect investors amid the chaos caused by the pandemic. The commission said this week it would extend the window for comment on proposals that had March comment deadlines, and would give broker-dealers more time to report data to the Consolidated Audit Trail (CAT) system, moves that both came in response to the COVID-19 pandemic.
Brown’s letter to the SEC was also signed by Sen. Chris Van Hollen, a Maryland Democrat who sits on the Senate Banking Committee.
In the letter, the Democratic senators asked the market regulator to “make formal extensions of comment periods and postpone non-critical rulemaking until the full public health and economic impacts of COVID-19 are understood.”
The House Financial Services Committee plan, besides calling for the non-COVID-19 rulemaking moratorium, also would direct the SEC to make rules for the disclosure of corporate supply chain disruption risks and pandemic risk more broadly, among other items.
“The circumstances we are facing are unprecedented and will require creative approaches,” Waters said in a statement. “The response should not include financial deregulation; regulators must not roll back the safeguards that have been put in place to protect the financial system and economy. In fact, this crisis has demonstrated that the safeguards Democrats enacted as part of the Dodd-Frank Act are working.”
This article originally appeared in the March 20, 2020 edition of Accounting & Compliance Alert, available on Checkpoint.
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