Reform watchers should make time to read an internal memo issued by Wall Street bank JPMorgan that says House Republicans may “seek to use the appropriations process to slow implementation of Dodd-Frank by underfunding the new federal agency staff needed to get those programs off the ground. This is already happening, as Congress was unable to increase funding for new positions at the Securities and Exchange Commission and the Commodity Futures Trading Commission in the recently passed Continuing Resolution, which — according to those agencies — set back enforcement of key provisions by several months.“
The 11-page memo, obtained and published by OpenSecrets.org, also says the Republican-led House will focus on some sections of the law for “oversight hearings and possible repeal,” including the Consumer Financial Protection Bureau, treatment of derivatives end users, the Financial Stability Oversight Council, and corporate governance provisions. The memo generally does not lay out JPMorgan’s lobbying strategies, simply saying that the bank will have “newfound opportunities to play a constructive role in the development of important public policies.”
Dodd-Frank whistleblower plan a model for others?
Many companies hope to water down the Dodd-Frank whistleblower protections by telling the Securities and Exchange Commission that they already put in place internal compliance programs under the Sarbanes-Oxley corporate reform law eight years ago. “The whistle-blower program does not negate Sarbanes-Oxley — companies will still have to keep compliance programs in place, often at a significant cost. But they may well fall into disuse now that employees have a monetary incentive to go directly to the SEC,” writes Peter Henning in the New York Times’ Dealbook.
The writers of Dodd-Frank estimated the whistleblower provision would result in about 30,000 tips to the SEC each year, and about half of those would be investigated. Because whistleblower programs have broad support from both Republicans and Democrats, Hennings writes that the new Dodd-Frank program could be a model for similar ones in health care and defense contracting. The SEC set a Dec. 17 deadline for public comments on its plan, and comments can be submitted on the electronic form here.
Big banks face higher insurance fees
Earlier this week, the Federal Deposit Insurance Corp. proposed to recalibrate how deposit insurance fees are calculated each quarter. The new plan shifts more of the insurance load to the biggest banks by basing the fee on a bank’s total assets, rather than the current method linking it to a bank’s customer deposits. What exactly does that mean? An extra $1 billion in annual deposit insurance fees from JP Morgan Chase, Bank of America Corp., and Citigroup Inc. combined, according to a sources quoted by the Wall Street Journal.
To weigh in on the proposed regulation, send an e-mail to the FDIC, referencing docket RIN 3064-AD66, to Comments@FDIC.gov .
Self-reg group for investment advisers
FINRA, the Financial Industry Regulatory Authority, is hinting that it could help the Securities and Exchange Commission police investment advisers. Suzanne Barlynn of Dow Jones Newswires reports that FINRA chief executive Richard Ketchum touts his group’s expertise as a “practical way” to address the SEC’s lack of staff to carry out regular examinations of investment advisers. Ketchum offered his views in a nine-page letter that is posted on the SEC’s Dodd-Frank website.