Republicans ask U.S. agencies for Dodd-Frank's cost

Fri Jan 28, 2011 5:31pm EST

* Letter requests details on law's impact on budgets

* SEC and CFTC have requested budget increases

By Dave Clarke

WASHINGTON, Jan 28 (Reuters) - House Republicans are asking U.S. financial regulators how much they will have to increase their budgets to carry out the new Dodd-Frank reforms as they scrutinize the controversial law.

Republicans opposed the law when it was moving through Congress and have said they will try to influence its implementation through oversight hearings and by scrutinizing agency budgets.

"It is our responsibility to ensure that federal agencies have the tools they need to carry out congressional mandates," House Financial Services Chairman Spencer Bachus and oversight subcommittee chairman Randy Neugebauer wrote the heads of nine agencies in a January 28 letter.

Among those receiving the letter were Treasury Secretary Timothy Geithner, Federal Reserve Chairman Ben Bernanke and special assistant to the president on consumer issues Elizabeth Warren.

The lawmakers asked for information on the cost of implementing the new law in fiscal 2011 and fiscal 2012 as well as information about how many new hires will be brought on board and whether more office space will be needed.

Most financial regulators do not need Congress to approve taxpayer money for their budgets each year and instead rely on fees charged to the financial industry for their funding.

Two exceptions are the Securities and Exchange Commission and the Commodity Futures Trade Commission.

Neither of these agencies have received the added funding they requested for the current fiscal year as Republicans have so far not agreed to go along with these budgetary boosts.

The heads of both agencies have warned that failure to deliver the added funds will impair their ability to carry out the new responsibilities given to them by Dodd-Frank.

Recognizing that not all agencies rely on Congress for their funding, the letter asks if regulators will increase fees to cover the cost of carrying out the law.

The letter also was sent to the heads of the Federal Deposit Insurance Corp, Office of the Comptroller of the Currency, SEC, CFTC, Federal Trade Commission and Federal Housing Finance Agency. (Reporting by Dave Clarke, Editing by Carol Bishopric)