Leading pro-business group the U.S. Chamber of Commerce is fine with the idea of financial regulatory reform -- but says Dodd-Frank doesn't go nearly far enough to make real change.
Given the political rhetoric out there that the Dodd-Frank Act is bad for business, the Chamber's new report, "The Unfinished Agenda," throws a few unexpected hand grenades.
On the one hand, they want fundamental changes in the U.S. regulatory environment, arguing that "it is critically important to reevaluate the form and substance of U.S. financial services regulation."
But, they say, Dodd-Frank failed to provide that, not because it went too far but because it was only a massive but superficial patch on an ailing system.
"The Dodd-Frank Act should never be confused with sweeping regulatory reform. Rather, it layered more process, people, and prohibitions on the cracked and crumbling 75-year-old regulatory foundation."
Real reform, the Chamber says, would extend high-tech methods to the regulators to speed up the rate at which U.S. securities firms can process transactions while catching and correcting mistakes.
Faster supervision and faster resolutions would deter copycat criminals while helping U.S. firms compete in a global market.
The SEC needs to streamline its org chart and not add new offices to keep up with reform, the report continues. Too many mandates and too many department heads have created an environment where regulators are forced to weigh conflicting priorities and take short cuts -- like paid whistleblower programs -- to keep up with events.
And FINRA is, the Chamber concludes, part of the problem.
As a non-governmental body with quasi-governmental powers, FINRA needs to be brought into a system of checks and balances to ensure that it is transparent and accountable to its members.
In fact, the Chamber calls FINRA's disclosure of how it runs -- and pays its people -- "extremely limited and superficial."
In the face of efforts in Washington to hand more power to FINRA, this rebuke should sting.