The House Financial Services Committee will zero in this Congress on Dodd-Frank Act implementation, with a likely rollback of the law with the reintroduction this week of Rep. Jeb Hensarling's Financial Choice Act, but hurdles remain in the Senate.
Hensarling, the Republican chairman of the committee, laid out Tuesday the committee's Oversight Plan for the 115th Congress, with the Securities and Exchange Commission as well as the agency's oversight of advisors and brokers in the committee's crosshairs.
Hensarling noted in his opening remarks at the markup on Tuesday that the Oversight Plan is "virtually unchanged" from the one adopted by voice vote at the beginning of the last Congress.
But with the order signed Feb. 3 by President Donald Trump to roll back the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Financial Choice Act will be the template used in this Congress to push ahead with such reforms.
Trump's order directs the secretary of the Treasury to meet with the members of the Financial Stability Oversight Council — consisting of 10 federal regulatory agencies including the SEC — to report back in 120 days on whether the current regulatory system meets the administration's "core principles."
"Dodd-Frank contains many provisions that bear no relationship to the causes of the 2008 financial crisis so the Treasury secretary's review is long overdue and should identify areas to change," said Norm Champ, the former head of the SEC's Division of Investment Management.
Champ, now with Kirkland & Ellis in New York, told ThinkAdvisor in a Monday interview that "the Financial Choice Act and the Investment Adviser Modernization Act, both introduced last year, will be templates used for Dodd-Frank Act reform. But the big question is: you can't repeal statutory provisions with a majority; the Senate democrats using the filibuster, can stop or make it difficult."
In any "bill or Treasury secretary action, I think they could try to help private funds fit better in the registered investment advisor regime," said Champ, who's also the author of the new book, "Going Public," which details his experiences at the SEC.
