We have some more fallout from the 2010 Dodd-Frank financial system overhaul bill. One of the newest SEC commissioners finds it "particularly troubling" that an important council created by the law doesn't have any "checks and balances" - or even a clear definition.
Speaking before the U.S. Chamber of Commerce on Monday, SEC Commissioner Michael S. Piwowar expressed concerns about the Financial Stability Oversight Council, which is made of up fifteen people appointed by the president. The council was created by the 2010 Wall Street Reform and Consumer Protection Act, which was co-sponsored by then-Senator Chris Dodd of Connecticut and then-U.S. Representative Barney Frank.
Piwowar was asked whether the council is legally obligated to perform a cost-benefit analysis of any alternative regulations that come before it, instead of just knee-jerking to the first idea the group agrees with. In his answer, Piwowar said nobody on Capitol Hill would provide him answers about the council's precise set-up, including whether the council really is an executive agency by itself, or if it has any boundaries or accountability at all:
"I've never gotten a clear answer, when I was a staffer on the Hill, in terms of what the legal obligation is of the FSOC [Financial Stability Oversight Council] to do cost benefit analysis, right? It's not an executive agency--or is it? I don't know. Are they bound by the OMB process [Office of Management and Budget]? Are they considered an independent agency? Are they bound by the APA [Federal Register's rule-making] process?
"Nobody seems to have a good answer on that. The fact that nobody seems to have a good answer on whether or not there are any particular checks and balances on this council is particularly troubling to me."
According to the Treasury Department's web site, the council, "for the first time, provides comprehensive monitoring of our nation's financial system" and is charged with "responding to emerging risks" to the system. With this president, however, it isn't too hard to figure out how much the council would like to be involved in. The council, among other duties, gets to keep the bailouts coming, in the event any firms are again determined "too big to fail." If duties are described so vaguely, then it won't be too difficult for President Obama to "fundamentally transform" the economy through the use of this council.
Mr. Piwowar was nominated to the Securities and Exchange Commission by President Barack Obama and confirmed by the Senate in August 2013.