Dodd-Frank made the Securities and Exchange Commission create a rule on the disclosure of payments by resource extraction issuers. The SEC finally got the rule out this fall. Now Congress is threatening to abolish the rule.
Section 1504 of the Dodd-Frank Act directed the Securities and Exchange Commission to
“issue final rules that require each resource extraction issuer to include in an annual report . . . information relating to any payment made by the resource extraction issuer, a subsidiary of the resource extraction issuer, or an entity under the control of the resource extraction issuer to a foreign government or the Federal Government for the purpose of the commercial development of oil, natural gas, or minerals..”
SEC finished the rule and finally adopted the Rules for Resource Extraction Issuers Under Dodd-Frank Act in September.
The strategy is not to pass a law removing section 1504. That would require getting the supermajority in the Senate to overcome the filibuster obstacle. That is hard and unlikely.
The plan is to use the Congressional Review Act to repeal the rule. That Act was part of Newt Gingrich’s Contract with America.
Under the law, Congress can stop a regulation passed within the last 60 legislative days. That counting is a bit fuzzy, but seems to stretch all the way back to the middle of June 2016.
I have little doubt that the rule will be rolled back. My question is whether this repeal counts towards the two repealed rules it takes to get a new one enacted under the Executive Order.
Sources:
- Rule 13q1 – Disclosure of Payments by Resource Extraction Issuers
- SEC Adopts Rules for Resource Extraction Issuers Under Dodd-Frank Act
- H. J. Res. 41—Providing for congressional disapproval under chapter 8 of title 5, United States Code…
- U.S. House Moves Forward With Plan to Kill Extractive Anti-Graft Rule by Samuel Rubenfeld
- Stars Align for the Congressional Review Act
- How Republicans Will Try to Roll Back Obama Regulations
There are still plenty of people who say the 2-for-1 kill order on federal regulations doesn’t apply to the SEC, because by statute it’s an independent agency exempt from the Trump order.
Legally, that does seem to make sense– but it’s an outcome contrary to what Trump wants, I’m sure, so the compliance community needs more guidance on this. Plus it puts the SEC chair nominee, Jay Clayton, in an awkward position: roll over for the boss and dilute the power of the agency you’re supposed to lead, or risk a tweet bomb.
I agree. I think the SEC could legally ignore the order. (also because it is so vague it’s to figure out what to do.)
The question is whether Clayton, and the next two to be appointed, will embrace the regulatory reduction philosophy.