Chamber calls for overhaul of financial regulatory system

While Congress mulls how to replace Dodd-Frank financial regulation, the United States’ largest business advocate is looking to reshape the system around it.

The U.S. Chamber of Commerce on Monday called for a complete reboot of how the United States regulates financial institutions and banks, insisting that the current framework is outdated and cumbersome for businesses of all sizes.

{mosads}Top Chamber officials panned the country’s “1930s regulatory system,” arguing it stifles economic growth and capital access with redundant, overbearing regulations. 

The Chamber’s Center for Capital Markets Competitiveness (CCMC) outlined potential fixes in a report released Monday that it said was meant to start an “honest debate” about the country’s regulatory future. 

The release comes a day before the House Financial Services Committee marks up the panel’s sweeping overhaul of Dodd-Frank.

Chamber officials said they and Financial Services Committee Chairman Jeb Hensarling (R-Texas) shared many of the same principles but that the Chamber’s plan took a broader look than the panel’s.

“It’s not really reacting to Dodd-Frank,” said David Hirschmann, president and CEO of the CCMC. “It’s about creating a regulatory system that went even beyond what Dodd-Frank tackled.”

The Chamber’s agenda starts by creating a presidential commission to restructure U.S regulatory agencies. The 10-person bipartisan board pulled from academia, industry and government would focus on clear lines and jurisdictions for regulators, not how they come to rules and enforcement.

The Chamber also called for a bicameral congressional panel to study emerging financial technology’s impact on the industry as nonbank lenders and electronic payment platforms explode in popularity.

Other proposals include cracking open certain regulators to more transparency. The Chamber calls for the Federal Reserve Board and Financial Stability Oversight Council to hold more open meetings.

The Chamber also wants to bring the Fed’s regulatory work, but not its monetary policy, more in line with existing agency rulemaking protocol. This means forcing the Fed to outline its pending regulatory work and review its past work in yearly strategic plans, along with releasing economic analyses of proposed rules.

The Fed “should have to abide by the same basic principles as other regulators — transparency, accountability, and due process in writing rules,” the report says.

It also contains several long-standing Chamber priorities: repealing the Department of Labor’s “fiduciary” retirement adviser rule, relaxing rules on financial risk, preserving arbitration and developing a way for large firms to drop the “systemically important financial institution (SIFI)” or “too big to fail” label.