Frank Says Spending Cuts Could Undo Derivatives Rules

By Phil Mattingly – // Jan 25, 2011
U.S. Representative Barney Frank
U.S. Representative Barney Frank. Photographer: Kelvin Ma/Bloomberg

Parts of the Dodd-Frank financial services overhaul face a “potential undoing” by Republican proposals to cut spending, senior House Democrats said.

Representative Barney Frank, the top Democrat on the House Financial Services Committee, said today that the Securities and Exchange Commission and Commodity Futures Trading Commission are underfunded already as they work on implementing the derivatives rules required in the financial services law.

House Republicans are proposing to cut $55 billion to $60 billion in non-defense spending in fiscal 2011. The cuts would bring spending levels close to fiscal 2008 levels. Frank, who said he had discussed the budget problems with CFTC Chairman Gary Gensler, said Democrats would push to increase appropriations to the two regulatory agencies.

“A dramatic spending increase to fund the SEC and CFTC, as envisioned by the authors of the Dodd-Frank legislation, would further the mindset that our nation’s problems can be solved with more spending, not more efficiency,” Representative Scott Garrett, chairman of the Financial Services subcommittee that oversees the SEC, said today in a statement.

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