One of the few leadership changes in the 113th Congress beginning in January 2013 is in the House Financial Services Committee, which will be chaired by Jeb Hensarling, R-Texas, an outspoken critic of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Mr. Hensarling was recommended by the GOP Steering Committee for the chairman position to the House Republican Conference, which is expected to confirm it Wednesday. Outgoing three-term chairman Rep. Spencer Bachus, R-Ala., is prevented by term limits from continuing, and the act's co-sponsor, Rep. Barney Frank, D-Mass. is retiring this session.
Mr. Hensarling blames Dodd-Frank for forcing companies and banks to sit on cash. “This is money not being used for investment and job creation because of — not in spite of — Dodd-Frank,” he wrote in an editorial in Politico earlier this year calling for repeal of the law.
The repeal of Dodd-Frank “is extremely unlikely, although there might be some effort to nibble around the edges,” Neil Simon, vice president for government relations at the Investment Adviser Association, said in an interview.
IAA, whose members manage a total of $10 trillion in assets for institutions and individuals, is pleased that Maxine Waters, D-Calif., is expected to become ranking minority member of the committee. Ms. Waters introduced legislation calling for user fees to beef up the SEC's adviser examination program, as opposed to other proposals that would subject them to a self-regulatory organization. “That is our first preference,” Mr. Simon said.
Mr. Hensarling, who voted against the 2008 federal bailout of financial institutions, currently is chairman of the House Republican Conference; he will leave that position when he becomes committee chairman. He also co-chaired the 12-member “supercommittee” tapped one year ago to reduce the federal deficit. That effort ended in a stalemate.