Democrats have indicated they may be more interested in reining in a pair of federal agencies created under Dodd-Frank if a Republican is elected to the White House, according to a lawmaker who recently passed legislation to that effect in the House.
Rep. Tom Emmer, R-Minn., who is seeking congressional oversight for the two agencies responsible for designating entities that are “too big to fail,” made the comment in an interview with the Washington Examiner. Those self-funding agencies are presently run by 10 presidential appointees, meaning that since their creation in 2010, they have operated as an effective arm of the White House, free of congressional intervention.
Emmer’s proposal to end their self-funded status, H.R. 3340, passed the House 239-179 in April, though it won just one vote from a Democrat. It’s awaiting action in the Senate, where it may need to win more than one member of the opposition to pass.
“I can tell you the Democrats I’ve talked to, we had a bunch of support even though we didn’t get their support on the floor,” Emmer said. “Ultimately we have an obligation to provide congressional oversight, and the Democrats that I’ve talked to when we had this discussion, they not only agreed on that, but they made a point of, is if there’s a Republican president … how happy are they going to be if it continues this way?”
The agencies, known as the Financial Stability Oversight Council and the Office of Financial Research, determine which companies to regulate as “systemically important financial institutions” on the basis that they pose “risks to the financial stability” of the country. Their funding, which exceeded $8 million in 2016, comes from assessments levied by the Federal Reserve on financial companies valued at more than $50 billion.
Critics charge the council has exceeded the boundaries intended for it by Congress, designating companies as wide-ranging as General Electric to insurers like Allianz, AIG and Metlife as systemically important. That critique was bolstered in early April when a federal judge reversed the council’s claim on Metlife, calling its determination “arbitrary and capricious.”
Emmer’s legislation would tie that budget to the regular congressional appropriations process, and it would also require the research arm to submit findings for public comment 90 days before release.
“They’re spending millions … which ultimately are taxpayer dollars, even if they are collected through so-called assessments on the biggest banks,” Emmer said. “That money is coming from the individual customers, they ultimately are the ones paying the bills.”
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He concluded in saying that the proliferation of self-funding, rogue agencies was a growing problem at the federal level.
“It’s about the Article I authority of Congress,” Emmer said. “The way this is set up, it’s a representative republic. Probably the biggest, most disingenuous thing we were all taught in our early years is that there are three coequal branches of government. That is not true. The legislative branch … is supposed to be the most powerful branch of government.
“What’s happened over the last 100 years plus, Congress has continually pushed its legislative authority off to these agencies, which are essentially under the executive branch. The executive branch was not intended to be the most powerful,” Emmer added. “It’s very troubling.”
