The U.S. Treasury and Sen. Elizabeth Warren warned Monday that a slew of bills set to be considered by a House panel Tuesday would be a step toward another financial crisis.
By advancing legislation to change the governance of the council of regulators set up by the 2010 Dodd-Frank financial reform law, Congress is “threatening to turn back the clock and potentially pave the way for a future crisis,” Treasury official Patrick Pinschmidt wrote in an op-ed for CNBC.
Warren, the Massachusetts Democrat and prominent critic of Wall Street, wrote on her Facebook page that Republicans “want to make it much harder for regulators to monitor huge financial institutions and prevent future economic meltdowns.”
“Democrats must stand strong and fight back Republican efforts to weaken oversight,” Warren said.
The legislation set to be marked up Tuesday in the House Financial Services Committee would make a number of changes to the Financial Stability Oversight Council.
The council is a creation of the Dodd-Frank law meant to address threats to the financial system that might otherwise escape regulators’ notice. Comprising the heads of the main federal financial regulatory agencies, the council has the power to identify any financial company that poses a risk to the financial system and subject it to closer oversight and tougher regulation.
The Republican bills would change the council by changing its membership, funding and process for identifying risky companies. One bill also would delay the council from identifying any more firms for added regulation by the Federal Reserve until the Fed spelled out what the rules were.
The council is examining asset managers such as BlackRock and Vanguard. Its members met Monday to talk about regulation of asset managers.
Republicans have faulted the council for lacking transparency and accountability.
The Obama administration and congressional Democrats have said that they are on high alert for Republican efforts to undo parts of Dodd-Frank, especially through the government funding process.
