Freshman lawmaker works to repeal transparency effort in Dodd-FrankBy Ryan Sibley May 12 2011 2:48 p.m. 1 comment
Last week members of the Capital Markets Subcommittee forwarded legislation to repeal a portion of Dodd-Frank that requires big banks to disclose income information for all of its employees onto the full Committee on Financial Services for consideration.
The Burdensome Data Collection Relief Act, H.R. 1062 was introduced in March, 2011 and has a long way to go. But if the Act passes it will repeal Section 953 b of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which is meant to increase transparency by forcing banks to disclose the median income for its employees.
According to members supporting the bill, the data collected could easily be misused and is difficult to gather while providing little benefit to investors. Yet 12 of the 20 committee members that voted on this issue disagreed.
Members opposing H.R.1062, mainly democrats, that debated this in last week's mark up session said that providing this information can actually help measure the strength of a bank thus protecting the economy from the dangers that caused the recent financial crisis. Rep.Brad Miller, D-N.C., and Rep. Jim Himes, D-Conn., agreed that If people are aware of how well or poorly a bank's employees are compensated it might help to predict a company's sustainability into the future.
In the first quarter of this year, 11 organizations including the Chamber of Commerce reported lobbying on this issue specifically. The amount of lobbying money spent by those organizations—not including the Chamber's total—was more than $5 million. The Chamber reported spending almost $11 million on lobbying in the first quarter. Some other organizations that lobbied on the issue include the American Benefits Council and Ameriprise Financial.
Rep. Maxine Waters, D-Calif., said 953 b will provide basic transparency and is not burdensome, with Himes adding that more information is always better for markets.
Rep. Nan Hayworth, R-NY, the freshman republican who introduced the legislation, says the pending regulation in Dodd-Frank is not productive and won't provide any useful information. During the mark up session she attempted to align herself with President Obama by claiming this is an effort to relieve businesses of "regulatory burdens", as he claims to be trying to do as well. Rep. Miller disagreed and said this is an effort that will lead to less transparency and at its core is only driven by lobbyists.
During Hayworth's campaign for office in 2010, the securities and investment industry was the second top industry to contribute to her, giving more than $132,000, followed by the health professionals industry at $218,000.
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