House approves bipartisan Emmer bill to bring transparency to non-banking financial institution regulations

The House of Representatives approved bipartisan legislation on Thursday introduced by U.S. Rep. Tom Emmer (R-MN) to bring transparency to the Financial Stability Oversight Council (FSOC).

The Financial Stability Oversight Council Reform Act, H.R. 3340, would subject the Office of Financial Research (OFR) and FSOC to the congressional appropriations process to enhance transparency and accountability.

Established under the Dodd-Frank Act, OFC researches non-bank institutions, while FOSC has the authority to designate them “systemically important,” subjecting them to additional regulatory oversight.

“I am a firm believer in a transparent and accountable government, and if a federal institution is failing to meet these fundamental criteria, Congress needs to fix it,” Emmer said. “Unfortunately, FSOC and OFR currently operate in the shadows, outside of the usual congressional oversight and the democratic process. I cannot stand by while businesses that had nothing to do with the 2008 financial crisis are being unjustly burdened with new regulations that result in Americans paying higher prices for essential financial products like home mortgages, as well as education, auto and business loans.”

In addition to subjecting OFC and FSOC to the congressional appropriations process, Emmer’s bill would also enhance OFR’s quarterly reporting requirements.

“Over the years, Congress has given much of its authority to unelected bureaucrats but this legislation returns the Constitutional ‘power of the purse’ back to Congress,” Emmer said. “Not only will this legislation reduce mandatory spending by $1.3 billion over the next ten years, but it will make FSOC and OFR transparent and accountable to the American people. Subjecting these entities to the congressional appropriations process, enhancing OFR quarterly reporting requirements and allowing Americans to weigh in on OFR rules and regulations gives Congress the tools it needs to provide the proper oversight of FSOC and OFR.”

U.S Rep. Jeb Hensarling (R-TX), the chairman of the House Financial Services Committee, said that FSOC and OFR operate in the “shadow regulatory system.”

“FSOC typifies not only the shadow regulatory system but also the unfair Washington system that Americans have come to fear and loathe: powerful government administrators, secretive government meetings, arbitrary rules and unchecked power to punish or reward,” Hensarling said. “Thus, oversight and reform is paramount.”

Speaking in support of the bill, U.S. Rep. French Hill (R-AR) said that federal agencies that aren’t accountable to Congress or taxpayers are “dangerous institutions.”

“Our system of government requires congressional oversight to the executive branch, and that oversight is dependent upon the power of the purse,” Hill said. “As it stands now, these two bureaucracies set their own budgets, and have made our oversight abilities toothless. Requiring them to be subject to the appropriations process the same as most other federal agencies is common sense, and anyone who supports the most fundamental principles of government should be in favor of this legislation.”

More Articles About Tom Emmer
More Articles About Government reform