Debating Dodd-Frank: What's in a Name?

Members of the House Financial Services Committee held a legislative hearing this afternoon to review five proposals to revise the Dodd-Frank Act. The hearing was announced on Monday by U.S. Rep. Scott Garrett, R-N.J., who chairs the Capital Markets Subcommittee.

The bills, proposed by five Republican Congressmen, seek to repeal various parts of Dodd-Frank that have proven unpopular with Republicans and the business community. In the firing line: a requirement that private equity funds to register with the Securities and Exchange Commission; that derivatives trading be reported and processed through a clearinghouse; and a rule that publicly traded companies calculate the median compensation of all employees and compare that to the CEO's pay. Republicans also want to repeal a liability provision for credit rating agencies and to increase the offering threshold for small companies.

One witness on the panel testifying before Congress, however, had some tart objections to all of the bills. Damon Silvers, policy director at the Federation of labor organizations AFL-CIO, who said he also spoke on behalf of Americans for Financial Reform and the Consumer Federation of America, fired off a flurry of rejoinders:

The Business Risk Mitigation and Price Stabilization Act asks that derivatives trading not be cleared through a registered clearing house; Silvers said this should be called the “Help Create Another AIG Act.”

The Asset-Backed Market Stabilization Act seeks to repeal a legal liability provision for credit rating agencies that froze the asset-backed securities market last summer, until the SEC effectively suspended the rule. Silver's suggestion: “Legal Immunity for the People Who Brought You the Financial Panic Act.”

The Small Company Capital Formation Act asks to increase the offering threshold for small companies exempted from SEC registration from $5 million to $50 million. According to Silvers, this is better called “The Promote Penny Stock Fraud Act.”

The Small Business Capital Access and Job Preservation Act, would exempt advisers to private equity funds from SEC registration requirements. Silvers would rename it “The No Accountability for Leveraged Buyout Funds Act.”

Finally, the Burdensome Data Collection Relief Act would abolish Dodd-Frank's requirement for public companies to disclose their median annual total compensation of all employees. Silvers said this should be called “The Promote CEO Pay Secrecy Act.”

Garrett's response to Silver's suggested new names: “I thank the gentleman for his testimony, but if we re-name all the bills, we won't continue to get the bi-partisan support that we've been getting.”