A group of eleven senators expressed concern about the speed of rulemaking in a letter to SEC Chair Mary Jo White last week. The letter asserted that the SEC has prioritized “discretionary actions” at the expense of the agency’s Dodd-Frank mandates. The letter identified several areas where the SEC has yet to take action, including:
· Credit rating agency reforms;
· Improved disclosure regarding asset-backed securities as well as improved SEC oversight of these markets; and
· Incentive pay not tied to the quality of the securitized products.
Additionally, the letter noted the reliance of structured offerings on credit ratings and stated that lack of action to resolve potential conflicts of interest could lead to another financial crisis. Citing the delay in finalizing the proposal meant to keep issuers from “betting against” their own structured offerings, the group emphasized that "[i]t is outrageous that this basic protection against abusive securitizations has yet to be finalized."