April 26, 2010

Congress Must Resolve Ombuds Issue Before Passing Financial Reform Bill

As the U.S. Senate grapples with legislation that would overhaul financial regulation, two proposed Ombuds programs could become an issue. The recently approved House bill would create Ombuds programs for the Securities and Exchange Commission and the Public Company Accounting Oversight Board. As currently drafted, the Senate bill does not.


In December, the House of Representatives passed the Wall Street Reform and Consumer Protection Act of 2009 (HR 4173), which included new Ombuds programs for the SEC and PCOAB. These two Ombuds programs would act as confidential liaisons between the agencies and individuals or firms with concerns regarding regulatory activities. As such, the Ombuds programs would would be similar to the Office of the Ombudsman for the Financial Industry Regulatory Authority.

Although some in the financial services industry have been calling for Ombuds program for years, the pending Senate bill (S 3217, "Restoring American Financial Stability Act of 2010") does not mention Ombuds. If the Senate bill is passed, a conference committee would need to resolve the differences between the two bills, including the proposed Ombuds programs. (Open Congress bill information: HR 4173, S 3217.)


Note: It's Gordon Gecko.

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