ASA Statement on Dodd-Frank at 15 Years Hearing

WASHINGTON – The American Securities Association (ASA) today sent a letter to the House Financial Services Committee as it holds a hearing to examine the impact of the 2010 Dodd-Frank Act on the American economy and the competitiveness of the U.S. capital markets.

“Dodd-Frank was passed in the wake of the 2008-2009 financial crisis and was intended to address the underlying causes of that crisis and promote lasting stability within the financial system. Yet, since then, the Federal Reserve and Treasury have had to step in multiple times to 'backstop' the American financial markets, and this has taught a generation on Wall Street that no matter what speculative risks they take, the Federal Government, with taxpayer money, will always bail them out,” said ASA President and CEO Chris Iacovella.

“Dodd-Frank also shifted significant decision-making authority away from Congress and toward administrative state bureaucrats, and this produced a sprawling set of nearly 400 new rules, many of which have little connection to the causes of the financial crisis or financial stability in general. Most glaringly, Dodd-Frank overtly politicized the SEC, an agency that before Dodd-Frank was admired for its objective and thorough approach to regulation and enforcement,” Iacovella wrote in the letter.

ASA outlined the following key recommendations and legislation to address the failures of Dodd-Frank:

• Dodd-Frank Improperly Delegated Authority to Unelected Regulators: ASA would support legislation to require this Committee and the Senate Banking Committee to approve or disapprove of every new policy financial regulators propose that reaches a set level of economic impact. ASA also supports Rep. Barr’s Business Owners Protection Act, which would repeal any unused authority for new regulations that were granted to the SEC under Dodd-Frank.

• Congress Should Establish SRO Boards Composed of Industry Representation: One of the more problematic provisions of Dodd-Frank was a mandate that the MSRB be made up of majority ‘public’ members as opposed to industry representation. The SEC also approved a rule to require FINRA to have a majority-public member board. To restore effectiveness, integrity, and trust in SROs, Congress should require their boards to return to a composition rooted in actual real-world industry expertise and leadership and free from special interest groups, academics, and other conflicted individuals with political agendas.

• ASA Supports Efforts to Depoliticize the SEC: ASA commends the Committee for including legislation that would repeal harmful Dodd-Frank disclosure mandates, including the conflict minerals rule and resource extraction rule. Additionally, the ASA supports Rep. Downing’s Protecting Private Job Creators Act, which provides for a permanent exemption for fixed income securities from SEC Rule 15c2-11.

Read ASA's full submission here.

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The American Securities Association (ASA) represents the retail and institutional capital markets interests of regional financial services firms who provide Main Street businesses with access to capital and advise hardworking Americans how to create and preserve wealth. ASA’s mission is to promote trust and confidence among investors, facilitate capital formation, and support efficient and competitively balanced capital markets. This mission advances financial independence, stimulates job creation, and increases prosperity. The ASA has a geographically diverse membership of almost one hundred members that spans the Heartland, Southwest, Southeast, Atlantic, and Pacific Northwest regions of the United States.