The U.S. House of Representatives passed a bill late Thursday that would undo a controversial provision of the Wall Street reform law that grants the Securities and Exchange Commission [SEC] broad control over the information it shares with the public.
The bill, which was introduced by Rep. Darrell Issa (R-Calif.) on September 15, will now be sent to President Obama for final approval.
The FOX Business Network first brought the provision – formally known as section 929I of the Dodd-Frank Wall Street Reform and Consumer Protection Act – to the public’s attention in July, after the SEC cited the new law in a FOIA action brought by the network. The provision grants the SEC the right to not “disclose records or information” that are typically the grounds for Freedom of Information Act requests.
Following the House’s action Thursday, House Financial Services Committee Chairman Barney Frank recognized the role Fox Business played in bringing the provision to light:
“This provision was included in the Dodd-Frank legislation after having been public for some time. Only after Fox Business News brought its lawsuit did people become aware of the provision’s negative implications,” he said in a statement. “We immediately scheduled a hearing and got bipartisan agreement that a legislative remedy was necessary.”
SEC Chairman Mary Schapiro defended the controversial rule at hearings led by Rep. Frank last week.
After passage of the bill by House lawmakers on Thursday, Rep. Issa issued a statement assuring the repeal of the provision will lift the veil on some of the SEC's activities and bring greater awareness to the public.
“Democrats and Republicans agree that we cannot allow the SEC, a regulatory body that failed to catch Allen Stanford's fraud and Bernie Madoff's ponzi scheme, to operate in secrecy. The SEC exists in no small way in order to create transparency and honesty of information from public companies so that we can have public confidence and trust in them. By repealing this section, we have reaffirmed our commitment to ensure that the SEC will be held to the highest possible standard of accountability and transparency.”
Sen. Patrick Leahy (D-Vt.) also commended the House for passing the bill and said it was crucial to maintaining transparency.
“This new law will ensure that the Freedom of Information Act [FOIA] remains an effective tool to provide public access to information about the stability of our financial markets,” he said in a statement.