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Outgoing SEC chair spars with Congress

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Outgoing SEC chair spars with Congress

Days away from finishing her term as chair of the Securities and Exchange Commission, Mary Jo White made a speech Jan. 17 airing out her final thoughts on the state of the SEC and taking a shot at Congress for threatening "the efficacy of the commission."

On Jan. 12, the U.S. House of Representatives passed the SEC Regulatory Accountability Act in a 243-184 vote, which would require the SEC to conduct a cost-benefit analysis of any proposed regulations and identify and assess available alternatives.

"The House passed a bill just last week that would impose conflicting, burdensome and needlessly detailed requirements regarding economic matters in commission rulemaking that would provide no benefit to investors beyond the exhaustive economic analysis we already undertake," White said in prepared remarks at The Economic Club of New York.

White warned that the House bill, which would also require the SEC to retrospectively review its regulations every five years and assess the impacts of "major rules," would jeopardize the SEC's ability to respond to market developments or potential market crises in a timely manner.

The speech also attacked elements of the House's Financial CHOICE Act, which would "similarly undermine agency rulemaking as well as cripple our enforcement capabilities." In its most recent iteration, the CHOICE Act, sponsored by House Financial Services Chairman and Texas Republican Jeb Hensarling, would require all major rulemaking costing $100 million or more per year to face a U.S. House and Senate vote. The bill would, however, expand the amount of penalties the SEC can levy in administrative and civil actions.

Hensarling fired back in a press release Jan. 17, calling White's comments "disappointing."

"If she's suggesting Congress should be subservient to the SEC, I'd advise her to re-read the Constitution," Hensarling said. "Congress created the SEC, not the other way around."

Near the end of her speech, White urged the need to defend the SEC from the House's legislative efforts. White will step down on Jan. 20, and Trump nominee and Sullivan & Cromwell LLP partner Jay Clayton is in line to replace her, if confirmed.

"The next commission must continue to challenge these efforts, and so should all of you," White said.