Small Business Gets Breaks in House Financial-Overhaul Bill
Lawmakers are adding sweeping exemptions to financial-regulation legislation that would benefit small businesses, a move that is irking some consumer groups and liberal lawmakers who contend that could compromise the effectiveness of the overhaul.
Bills currently under consideration in the House exclude thousands of community banks from oversight by the proposed Consumer Financial Protection Agency, and transfer oversight of small investment advisers to state regulators. The latest move came Tuesday, when a House panel voted to exempt small public companies from complying with a provision of the 2002 Sarbanes-Oxley law, which was passed after a series of corporate scandals earlier this decade.
The task for Democrats is finding enough compromises to make the bill palatable to Republicans, while not alienating liberal members. Democrats are also trying to be sympathetic to small-business groups, who argue they didn’t contribute to the financial crisis and shouldn’t have to endure more regulation. The Obama administration has been making an
The series of moves, which have not been finalized, are unnerving many on the left, who say the carve-outs diminish the administration’s effort to plug holes and change the regulatory system to prevent another crisis.
Jen Psaki, deputy White House press secretary, said: “Our focus must be on addressing the threats posed to investors and consumers by large, interconnected companies, rather than placing an undue burden on small businesses. We are working closely with Congress to determine the best vehicle for getting that accomplished.”
The changes to Sarbanes-Oxley focus on Section 404 of the law, which has long been controversial because of the costs involved. That provision requires companies and their auditors to keep closer control over their financial reporting. Companies with less than $75 million in market capitalization have been exempt from complying with certain elements, but the provision is set to expire next year.
source: online.wsj
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