House Oversight Committee Masks Deregulation Agenda Behind Cost-Benefit Shield

A House Oversight subcommittee hearing today, featuring Securities and Exchange Commission (SEC) Chair Mary Schapiro, focuses on the false claim that the agency is not doing cost-benefit analyses in its rules, Public Citizen said today. Lawmakers are ignoring the real problem of the glacially slow progress of financial reform.

"This hearing features Wall Street champions masking a deregulatory agenda behind specious claims about insufficient cost-benefit analysis requirements," said Amit Narang, regulatory policy advocate with Public Citizen. "The committee should be seeking ways to make the SEC's job easier, such as addressing its significant resource constraints and understaffing, rather than throwing more roadblocks in the agency's path. The SEC already conducts cost-benefit analysis routinely in its rulemakings as part of its legal requirement."

The regulations the SEC needs to write are critical, and time-wasting exercises like today's hearing only hurt the public, Narang said.

For example, Americans are infuriated by high gas prices, but the SEC could have limited the rise in price by curbing speculative practices responsible for driving up prices.

"Soaring gasoline prices constitute one clear result of industry's ability to run wild in the absence of adequate regulation," said Bartlett Naylor, Public Citizen's financial policy advocate. "The SEC has yet to take the steps necessary to prevent the regulation of complex derivatives. According to leading experts, this has meant as much as a 75-cent rise in gasoline prices over the past four months - a serious cost to American consumers at the pump. Congress should stand up to intense industry lobbying and lame claims about insufficient economic analysis that delay key financial reforms in the best interests of consumers."