Financial Regulators Face Budget Limits In House

Wednesday, 15 Jun 2011 12:04 PM

 

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The U.S. Securities and Exchange Commission would be denied a dramatic funding increase for the 2012 fiscal year under a bill released Wednesday by the House Appropriations Committee.

The Republican-led committee's bill would also strip the newly created consumer financial watchdog of its independent funding, subjecting it to the politically charged annual budget process starting in 2013.

"This new agency created by the Dodd-Frank legislation has not yet been fully constituted and many questions remain as to its authority and mission," the committee said in a statement.

The new Consumer Financial Protection Bureau will open its doors next month and under the Dodd-Frank law it will receive funding directly from the Federal Reserve.

Republicans have complained this will limit the ability of Congress to oversee the bureau.

The spending legislation released Wednesday would limit the amount the bureau could receive from the Fed in 2012 to $200 million.

The Obama administration officials setting up the bureau estimated in February that the new agency would need a budget of $329 million in fiscal 2012.

The funding for the SEC would be kept steady at $1.2 billion for the fiscal year that starts Oct. 1, according to the bill. The Obama administration had asked for a $222 million bump in funding for the agency that was given more responsibility to police markets in last year's Dodd-Frank financial reform law.

Republicans are trying to attack the overhaul of financial regulations by denying funding to agencies responsible for overseeing the reforms.

The SEC and the Commodity Futures Trading Commission are the two main financial regulators whose budget must be approved by Congress each year.

Leaders of both agencies have said that under their current budgets they will have trouble implementing the policy changes called for by Dodd-Frank.

© 2014 Thomson/Reuters. All rights reserved.

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