Lawmakers are pushing a bill that would greatly weaken the autonomy and influence of regulators such as the Commodity Futures Trading Commission and the Securities and Exchange Commission. The bill, which is set to go before a Senate committee later this month, would allow the president to second guess rules put out by government agencies.
The proposal mandates that agencies carefully study the economic effects of new regulation. In effect, the proposal could lead to a delay for a number of reforms in the financial industry.
Critics argue that the bill is an unnecessary measure, as the White House already has ample authority to require agencies to conduct an economic impact study of its rules. “Those who support preserving the status quo where Wall Street regulates itself will find much to like in this legislation,” said Amit Narang, a regulatory policy advocate at Public Citizen, a nonprofit government watchdog group.
The bill builds an explicit path for the White House to influence the rule making process at independent government agencies. Agencies would be required to submit a report on the economic effects of their proposed rules, which is subject to scrutiny by the Office of Information and Regulatory Affairs, an arm of the White House. A negative review from the office would delay the rule for up to three months and force the agency to defend its approach.
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