Restoring American Financial Stability Act of 2010--Continued

Floor Speech

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Ms. COLLINS. Mr. President, I rise to speak in support of an amendment that Appropriations Committee Chairman Inouye, Vice Chairman Cochran, Financial Services and General Government Appropriations subcommittee Chairman Durbin and I filed to the Restoring American Financial Stability Act regarding funding for the Securities and Exchange Commission--SEC.

This amendment would strike the section that would permit the Securities and Exchange Commission to be ``self-funded''. I have serious concerns with this provision because it would allow the SEC to self finance and thus avoid the scrutiny and oversight of the appropriations process. Our bipartisan amendment would keep SEC funding as part of the appropriations process and maintain critical congressional oversight.

The financial crisis and its consequences have served to remind us all of the critical requirement for more robust oversight and heightened transparency throughout our regulatory environment and financial system. As we have seen, most recently in the review of the SEC's actions in the Bernie Madoff Ponzi scheme, there is clearly a demonstrated need for more Congressional oversight. The annual budget and appropriations process ensures congressional oversight of vital enforcement agencies such as the SEC. As noted by Vice Chairman Cochran, our amendment recognizes the need to ``regulate the regulators'' and to hold accountable those regulators who fail do their jobs correctly.

And the recent inspector general investigation revealing that high-level SEC employees spent their days looking at porn rather than pursuing wrong-doing demonstrates the need for oversight.

The appropriations process subjects the SEC to a review which must balance the requests of the Commission against the competing needs of other Federal agencies. That process, however, is grounded in the Constitution and the very foundation of our government is based on the concept of checks and balances. While I appreciate the accomplishments Chairman Shapiro has achieved during her tenure as chairman, funding decisions and the process by which they are made, cannot be based on any particular holder of an office, but rather on government-wide needs and the best interests of the taxpayers.

Allowing the SEC to have sole authority to negotiate the fees that support its operations with the institutions they regulate precludes any meaningful oversight by Congress and invites conflicts of interest. Reports by the Government Accountability Office and the SEC Inspector General regarding enforcement procedures and internal controls over financial reporting highlight the need for congressional oversight. Also, the GAO has noted that SEC's current system of transaction-based fees could provide revenues that are less predictable and more difficult to estimate than the assessments used by bank regulators to fund their operations.

While the budget and appropriations process is challenging for all Federal agencies, Senator Durbin and I, in our roles as Chairman and ranking member of the Financial Services and General Government Appropriations subcommittee, have given careful review to all resource requests from the SEC and consistently placed a high priority on its requests, recognizing the agency's critical enforcement role. For the current fiscal year, Congress provided $1.11 billion, a 25 percent increase over the fiscal year 2007 level and $85 million above the amount that the President and the SEC requested.

The financial reform bill passed by the House of Representatives does not include a provision for the SEC to be self-funding. I share the hope of Chairman Inouye and all of the cosponsors of this amendment that the conference agreement on the bill before the Senate will preserve the critical oversight function inherent in the appropriations process. I urge that the SEC self-funding provision be dropped from the bill in conference to ensure that Congress can continue to play an important role in the oversight of our financial regulators.

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