In a letter dated May 17, 2012, the American Bar Association joined the many others who have supported self-funding for the SEC. In the letter addressed to the ranking members of the House Committee on Financial Services and the Senate Committee on Banking, Housing and Urban Affairs, lawyers writing on behalf of the ABA state that while the ABA has "long favored greater funding for the SEC," the agency's dramatically expanded responsibilities under Dodd-Frank require a new approach to funding. To provide the SEC with a stable and more predictable sources of revenue, the letter says, the ABA now strongly favors Congress authorizing self-funding of the agency.

The ABA letter, which is signed by Giovanni P. Prezioso and William F. Kroener III, Co-Chairs of the ABA Task Force on Financial Markets Regulatory Reform, reiterates many of the arguments made by current and former SEC officials when Congress considered making the SEC self-funded as part of Dodd Frank. These arguments include:

other regulators such as the Federal Reserve Board and the FDIC are self-funded;

the SEC could easily self-fund through the transaction and registration fees it charges regulated entities;

self-funding would eliminate the chronic under-funding that has hindered the SEC; 

self-funding would enable the SEC to make multi-year commitments to items such as technology and infrastructure; and

Congress can retain the ability to review a self-funded SEC's activities "given the ample mechanisms and opportunities established in recent years for expanded congressional oversight of the agencies outside the annual appropriations process."

I have not seen any indication of it, but perhaps there is a new-found desire by some in Congress to re-address the issue of self-funding that has prompted the ABA to weigh in on the issue? If not, then the ABA will simply join the list of SEC officials and other proponents of self-funding that were ultimately ignored by Congress when it passed Dodd-Frank. As Sen. Shelby explained when Dodd-Frank was passed in June 2010, Congress did not move forward on SEC self-funding because "severe managerial and operational failures" like the Madoff fraud left many in Congress unwilling to remove the SEC from Congressional oversight of its funding. It seems doubtful that anything has changed on that front in the past two years, but it is worth keeping an eye on.

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