TEXT OF INTERVIEW
Jeremy Hobson: Now to an important piece of financial news going on in Washington. The Securities and Exchange Commission and other regulators are waiting to hear if their budgets will be cut. This is just as they’re trying to comply with the new financial reform law. Marketplace’s Economy 4.0 project looks at ways the financial system can better serve more people going forward and our special correspondent David Brancaccio joins us now from New York. Hi David.
David Brancaccio: Hello there.
Hobson: So what’s the status of the money for these regulators right now?
Brancaccio: Well like the rest of the federal budget, up in the air. The Senate earlier this week rejected one of the plans from the House of Representatives that was talking about cutting $25 million from the Securities and Exchange Commission budget, perhaps cutting Commodity Futures Trading Commission’s budget by about a third. After the global financial system melted down, last year’s Congress thought all right, we need to watch over the financial system a little better. It produced the big Dodd-Frank Financial Reform Law, and among other things it handed oversight of a $300 trillion derivatives market to the CFTC. And the CFTC says, we’d like some money to do this. The SEC hires more people to do its thing and at the moment, no new money.
Hobson: But cutting back on money’s not a done deal yet, right?
Brancaccio: No. In fact, of course, the Senate and the House have to come together about all this — that will unfold hopefully over the next couple of weeks. But even so, besides the CFTC layoffs, the SEC chairman has for now stopped setting up five new bureaus that were supposed to do things like oversee credit ratings agencies, oversee financial whistle blowers, oversee the muni bond market. I mean, important stuff.
Hobson: Yeah, and one of the important parts of the financial reform law that was passed, David, is this Consumer Financial Protection Bureau. Is there any funding problem on that front?
Brancaccio: Well when that thing was set up, Congress was onto this, was hip to this idea that the controversial agency could be reined in by the purse strings, by its budget. So the law says that it’s the Federal Reserve that funds the Consumer Financial Protection Bureau. But the financial plan that came out of the House has a line in there that curbs amount of money for this new Consumer Financial Protection Bureau. And I’m no lawyer, but some experts think that restriction is just illegal.
Hobson: Marketplace’s special correspondent David Brancaccio. Check out David’s blog here. David, thanks.
Brancaccio: My pleasure.
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