WASHINGTON (Reuters) - Implementation of the new financial reform law should be delayed for a year so regulators have more time to understand the impact of rules they are writing, a key House Republican said in an interview with Reuters.
Representative Randy Neugebauer of Texas, who will head the House of Representatives Financial Services oversight subcommittee next year, said the “pause” would allow regulators to study whether a rule required by the law would do more harm than good.
“I think the first thing we need to do is hit the pause button here and extend these deadlines and get a picture of where we are,” the Republican lawmaker said on Tuesday.
He added exceptions could be made in “compelling cases where we’re too far past this deadline or we actually need this in place.”
Neugebauer said he has discussed the issue with other committee Republicans and he may introduce legislation next year requiring the delay. Such a bill has little chance of making it into law with Democrats still in control of the Senate and the White House.
Neugebauer’s proposal, however, is another sign that Republicans will push regulators to go slow in implementing the most sweeping overhaul of the rules governing the financial system since the Great Depression.
The law, enacted in July and dubbed Dodd-Frank after its authors, remains a political flashpoint and will continue to be one when Republicans take control of the House of Representatives next month.
Democrats have heralded the overhaul as providing the tools needed to prevent a replay of the 2007-2009 financial crisis while Republicans have called it a prescription for onerous regulations that will slow the economy.
The law requires potentially hundreds of rules to be written, many under tight timelines, in areas such as oversight of the derivatives market, capital rules for banks and consumer protection.
In his new role as head of the oversight subcommittee, Neugebauer said he will hold hearings on various aspects of the law as well as on the government’s role in the housing market, which is expected to be a major policy battle between Republicans and the White House next year.
At the Dodd-Frank hearings Neugebauer said his goal is to question regulators on whether they believe a rule is really needed or if it is only being put in place because it is required by the law.
“It would be helpful to have a regulator articulate what’s wrong, how this fixes it and why this is the best solution,” he said.
The hearings will also provide “a little bit of an opportunity, which we didn’t have, to inject Republican ideas about this process.”
Reporting by Dave Clarke, Editing by Dave Zimmerman