Republicans aired long-running gripes to regulators Tuesday about a panel created to monitor the most powerful forces in financial markets.
The Financial Stability Oversight Council was created to gather top financial regulators from across the federal government in one place to discuss broad risks to the financial system.
But Republicans heaped scorn on the group as too powerful and excessively opaque at a hearing Tuesday, as the GOP pushes legislation to limit its ability to impose tougher rules on large financial institutions.
The House Financial Services Committee heard testimony from eight members of the 10-person panel, including the heads of major regulators like the Securities and Exchange Commission, Commodity Futures Trading Commission and Federal Deposit Insurance Corporation.
The panel has pushed legislation in the past that would alter the FSOC’s operations, making more of its operations transparent and placing additional limits on its powers. And that message continued Tuesday, as Republicans heaped criticism on the panel’s efforts.
Chairman Jeb Hensarling (R-Texas) opened the hearing by calling the FSOC one of the most powerful and least accountable agencies in the federal government, and said reform of the panel is “paramount.”
“FSOC typifies not only the shadow regulatory system but also the unfair Washington system that Americans have come to fear and loathe,” he said.
Republicans have pushed several bills that would alter FSOC operations. One of the most significant would raise the threshold for what constitutes a “systemically significant” firm bearing stricter oversight.
Currently, the FSOC automatically grants such a status to institutions with over $50 billion in assets, but GOP legislation in the Senate would raise that to $500 billion.
Such efforts have faced significant Democratic opposition, and the White House has been consistent in opposing efforts to rework portions of Dodd-Frank, one of its landmark legislative achievements.
Tuesday’s hearing followed a path similar to many hearings regarding significant portions of that 2010 law, as Republicans highlighted their critiques with the overhaul and Democrats sought to defend it.
Rep. Maxine Waters (D-Calif.) the top Democrat on the panel, accused her GOP colleagues of a “convenient case of amnesia” on the topic, arguing that the financial crisis proved the need for specific oversight of systemically important institutions.
While several top regulators testified at Tuesday’s hearing, two of the panel’s biggest names — Treasury Secretary Jack Lew and Federal Reserve Chairwoman Janet Yellen — did not testify.