WASHINGTON — The head of the Securities and Exchange Commission is objecting to a plan being weighed by the Obama administration to create a financial watchdog for consumers that would assume oversight of mutual funds.
The SEC chief’s split with the administration shows how hard it may be for a broad overhaul of financial rules to overcome turf wars among various regulators and for a consensus to be reached on Capitol Hill.
SEC Chairman Mary Schapiro on Wednesday said she opposed the plan discussed Tuesday night by Treasury Secretary Timothy Geithner and other administration officials that would chip away at the SEC’s own powers. She said giving any new entity authority over mutual funds would lessen the government’s protection of investors — her agency’s core mission.
Many of the SEC’s responsibilities — companies’ financial disclosures, shareholder rights, stock trading, brokerage firm practices and mutual funds — involve investor protection, Schapiro said.
"So it’s not a discrete thing that gets moved away without really damaging the fabric of the entire investor protection regime,” she said.
About the plan
The plan the administration is weighing would centralize the enforcement of laws that protect consumers of financial products like credit cards, mortgages and mutual funds. That mission is now spread across a patchwork of federal and state agencies, including the SEC, Federal Reserve and Federal Trade Commission.
Any changes to the nation’s financial oversight would require congressional action. And it’s unclear whether lawmakers will unite behind a single approach this year.
Schapiro’s comments marked her first sharp public breach with the administration over an overhaul of rules designed to prevent another financial crisis. Schapiro in recent weeks has told Congress, which is debating the changes, that she thinks the SEC must play a key role as an independent watchdog protecting investors in any new regulatory system.
By contrast, the White House leans toward recommending that the Fed alone become a new supercop for financial companies that could set off another meltdown.
Schapiro says she’s concerned about an "excessive concentration of power” over financial risk in any single agency.
Lawmakers are divided.
by the associated press
The SEC chief’s split with the administration shows how hard it may be for a broad overhaul of financial rules to overcome turf wars among various regulators and for a consensus to be reached on Capitol Hill.
SEC Chairman Mary Schapiro on Wednesday said she opposed the plan discussed Tuesday night by Treasury Secretary Timothy Geithner and other administration officials that would chip away at the SEC’s own powers. She said giving any new entity authority over mutual funds would lessen the government’s protection of investors — her agency’s core mission.
Many of the SEC’s responsibilities — companies’ financial disclosures, shareholder rights, stock trading, brokerage firm practices and mutual funds — involve investor protection, Schapiro said.
"So it’s not a discrete thing that gets moved away without really damaging the fabric of the entire investor protection regime,” she said.
About the plan
The plan the administration is weighing would centralize the enforcement of laws that protect consumers of financial products like credit cards, mortgages and mutual funds. That mission is now spread across a patchwork of federal and state agencies, including the SEC, Federal Reserve and Federal Trade Commission.
Any changes to the nation’s financial oversight would require congressional action. And it’s unclear whether lawmakers will unite behind a single approach this year.
Schapiro’s comments marked her first sharp public breach with the administration over an overhaul of rules designed to prevent another financial crisis. Schapiro in recent weeks has told Congress, which is debating the changes, that she thinks the SEC must play a key role as an independent watchdog protecting investors in any new regulatory system.
By contrast, the White House leans toward recommending that the Fed alone become a new supercop for financial companies that could set off another meltdown.
Schapiro says she’s concerned about an "excessive concentration of power” over financial risk in any single agency.
Lawmakers are divided.
by the associated press
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