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WASHINGTON, DC – The American Securities Association (ASA) last week submitted a comment letter to the U.S. Department of the Treasury in response to the Department’s request for information as it relates to the development of a national strategy for financial inclusion.
In December 2023, Treasury released a request for information seeking input from a wide variety of stakeholders to ensure that the strategy identifies clear and actionable opportunities for the public, private, and nonprofit sectors to advance financial inclusion and broaden access to financial products and services among underserved communities.
“ASA’s membership is made up of financial services firms that operate in areas that are typically neglected by large Wall Street firms. Our members contribute to the livelihood and vibrancy of the local economies we operate in by helping businesses raise capital so they can expand and create jobs. ASA members also serve and advise America’s working families by helping them save for retirement, their children’s education, or other financial goals in life,” wrote American Securities Association General Counsel Jessica Giroux. “When regulators develop and implement new rules, they often fail to consider how costs of compliance disproportionately fall on firms that do not have the same compliance resources as the largest Wall Street firms. Given the importance of non-Wall Street broker-dealers to local economies, Treasury should consider regulatory reforms that support a national strategy for financial inclusion.”
In particular, ASA provided the Treasury Department with comments on the following areas of concern:
I. SEC Predictive Analytics Proposal. The SEC’s proposal would disproportionately affect lower income and underserved communities by making it virtually impossible for brokers to service these customers. More fundamentally the ASA is concerned that the SEC is seeking with the predictive analytics proposal to undermine Regulation Best Interest, a rule that was adopted by the SEC in 2019 after a years-long examination of standards of conduct for broker-dealers and investment advisers. The SEC also lacks any legal authority to adopt the predictive analytics rule.
II. SEC Equity Market Structure Rules. The SEC’s proposed package of market structure rules would significantly change the landscape of equity trading in the U.S. and would raise the cost of trading for all investors.
III. Lack of SEC Capital Formation Agenda. Under Chairman Gensler, the SEC has embarked on the most aggressive rulemaking agenda in recent history, with roughly 50 rulemakings on the agency’s current Regulatory Flexibility Act list. However, not one of these rulemakings is designed to help entrepreneurs and small businesses raise capital, or to expand investment opportunities for households who don’t currently meet the definition of “accredited investors”.
Read the American Securities Association’s full comment letter here.
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About the American Securities Association
American Securities Association, based in Washington, DC, 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.