Alabama Sens. Shelby, Jones will have a key voice in bipartisan financial reform effort
Following the May passage of a bill rolling back parts of the Obama-era Dodd-Frank banking regulations, Congress has a chance to install more bipartisan financial reforms, and Alabama will have a say.
The Republican-sponsored Consumer Financial Choice and Capital Markets Protection Act of 2017 currently awaits consideration by the Senate Banking Committee, on which both Sens. Richard Shelby (R-Tuscaloosa) and Doug Jones (D-Mountain Brook) serve.
The bill would allow money market funds to elect to operate using a different method of valuation of its shares than currently required per a 2014 Securities and Exchange Commission (SEC) regulation.
Passed as part of the post-financial crisis regulatory framework, the SEC enacted variable valuation, an accounting nightmare, according to its critics.
One of those critics, Anthony Carfang of the financial consulting firm Treasury Strategies, argues that the rule scared investors into removing $1.2 trillion money market funds, which have been a go-to form of financing for local governments, hospitals, and universities.
Republicans and Democrats agree with Carfang. A House version of the Republican-sponsored reform bill has 29 Democrat cosponsors, including Alabama’s Rep. Terri Sewell (D-Birmingham). The Senate bill has two Democrat cosponsors.
Both Shelby and Jones will be among those who craft the bill’s final version in the Senate, and prospects of passage are looking good.
Earlier this year, Jones cosponsored the Economic Growth, Regulatory Relief and Consumer Protection Act, a Republican-led initiative to roll back the regulatory burden of Dodd-Frank that passed the Senate with 16 Democrat votes.
“The bill also allows community banks and credit unions, who often only have a few dozen employees, to put their resources into new loans rather than regulatory compliance staff,” Jones wrote in a March editorial about why he supported rolling back parts of Dodd-Frank.
In Alabama, the reform effort has garnered support from a wide variety of interested parties. State Treasurer Young Boozer, State Banking Superintendent Mike Hill, Alabama State University, Montgomery Mayor Todd Strange, and Senate Majority Leader Greg Reed among others have all endorsed the legislation.
Sen. Jones could not be reached for comment on the legislation.
See a full list of the legislation’s supporters here.
@jeremywbeaman is a contributing writer for Yellowhammer News