“The federal government’s Wall Street watchdogs will feel the pinch of sequestration if Washington lawmakers cannot strike a deal by March 1 to avoid the across-the-board cuts.
“A trio of the nation’s top financial regulators would face millions of dollars in cuts under the sequester — a budget squeeze that could limit their ability to conduct examinations, purchase needed technology, and generally keep a close eye on Wall Street.
The Securities and Exchange Commission’s (SEC) $1.3 billion budget would fall by $108 million, while the CFTC would take a $17 million haircut to its $205 million budget.
The OMB’s report also states that the new Consumer Financial Protection Bureau (CFPB) — despite not having its budget set by Congress like the SEC and CFTC — would also face cuts totaling $34 million from its $448 million budget.
The SEC and CFTC are already operating under budgets the White House claims are insufficient for their expanding workloads, which have grown since the Dodd-Frank financial reform law was enacted.
The White House has requested hefty boosts for both agencies, but Republicans have argued their budgets should be cut rather than increased.
In the face of looming cuts, regulators pressed lawmakers on the need for more resources when they testified before the Senate Banking Committee earlier this month.
“We desperately need more resources,” said CFTC Chairman Gary Gensler. “It’s a hard ask when Congress is grappling with budget deficits, I know.”
“You’ll never hear a regulator say, ‘We’ll get through this without a problem,’ but my guess is that there are creative ways to manage around it,” Gardner said. “I think it will be a bit of a non-event … I just don’t see the big impact.”
However, Dennis Kelleher, president and CEO of Better Markets, is more skeptical.
“They can barely do the job they’re supposed to do now … it would be a travesty if, on top of that, their resources were cut,” he said.
“I think it’s going to be extremely difficult for the SEC to take the cuts they’re talking about and still be an effective regulator.”
Read full The Hill article here