Editorial: SEC needs to fix law’s onerous impact on civic volunteers
“This law (the Dodd-Frank Wall Street Reform and Consumer Protection Act) creates a new, more effective regulatory structure, fills a host of regulatory gaps, brings greater public transparency and market accountability to the financial system and gives investors important protections and greater input into corporate governance.”
So says Securities and Exchange Commission Chairman Mary L. Schapiro on the SEC’s website.
“The real crunch comes after the rules are in place and we have to operationalize them. We lack the resources to do that.”
So Schapiro said Monday to the Senate Banking Committee.
To which library district trustees everywhere can only smile nervously and say, “Whew.”
Because as Dodd-Frank has been interpreted so far, those civic-minded community volunteers who act as custodians of their local libraries are now financial advisers who must be registered. Just what that means and why it is necessary is murky, but for anyone willing to sift through a 231-page document on the SEC website ( www.sec.gov/ info/municipal/mbonds/fa.htm), there may be an answer. Or not.
Still, unless Bernie Madoff has had his mischievous hand in a local library bond issue, that kind of municipal activity can’t be likened to the causes behind the national economic meltdown Dodd-Frank was supposed to address.
Locally, administrators such as Mike Wirt of the Spokane County Library District have their fingers crossed that Congress will step in and fix what seems to have been an unintended consequence of the complex measure. That would be the responsible thing to do.
Among other tasks, the law directs the agency to issue hundreds of new regulations and conduct dozens of studies. The agency has more duties than funds and staff to carry them out, so registering local library trustees should rank low on its priority list – far below securities fraud cases, for example. The financial pinch will become clearer as committees in the House and Senate take up the SEC budget over the next two weeks.
The law also ordered a report by the Government Accountability Office, but that effort focused on financial planners, who are paid for their investment advice. Library trustees never entered the picture.
But avoiding the law’s difficulties just because the SEC can’t afford to enforce them is not enough. Dedicated citizens who step forward to take on necessary civic responsibilities should not have to worry about the potential ramifications. If they do, many of them will simply decide it isn’t worth it, which would be a sad loss for the communities that need them.
Congress needs to correct this madness.
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