House Panel Votes to Repeal Dodd-Frank Resource Extraction Rule

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By Andrew Ramonas and Jeff Bater

The House Financial Services Committee Dec. 13 approved three securities bills and a banking measure, including legislation that would repeal Dodd-Frank Act disclosure requirements for oil and gas companies.

The bill ( H.R. 4519) from Rep. Bill Huizenga (R-Mich.) targets requirements that companies reveal the payments they make to governments to try to extract oil, gas, and minerals. The bill would amend the 1934 Securities Exchange Act to repeal Dodd-Frank’s Section 1504.

The measure, which the panel approved 33-27, would prevent the Securities and Exchange Commission from reviving the resource extraction regulation. President Donald Trump signed into law legislation that threw out the rule in February, but without the repeal the SEC could redo the regulation.

The agency has adopted the rule twice, most recently in 2016. The rule first was adopted in 2012, but the American Petroleum Institute secured a court ruling vacating the regulation the following year. Oxfam America Inc. then won a lawsuit to speed up rulemaking on the regulation in 2015.

Other Securities Bills

Legislation to free more stocks of state securities registration also advanced on a 46-14 vote. The National Securities Exchange Regulatory Parity Act, H.R. 4546, from Rep. Ed Royce (R-Calif.) would exempt from state blue-sky laws any stocks qualified to trade in the national market system. Only securities listed or eligible for listing on the New York Stock Exchange, NYSE American, or Nasdaq get the exemption now.

A provision similar to Royce’s bill is part of a targeted Dodd-Frank overhaul bill (S. 2155) that was recently approved by the Senate Banking Committee. The Senate bill, which has substantial support from Democrats, could see floor action in 2018.

The House committee also approved legislation, 34-26, intended to make the registration of securities offerings easier for small companies. The Accelerating Access to Capital Act, H.R 4529, from Rep. Ann Wagner (R-Mo.) would let more companies use Form S-3 shelf registration, which is a simpler process for offerings. The form is currently only available to companies whose market capitalization is more than $75 million.

The House in 2016 advanced a similar measure, which didn’t receive a vote on the Senate floor in the previous Congress.

Bank Exams

The banking bill, H.R. 4545, introduced by Rep. Scott Tipton (R-Colo.), addresses concerns about the process used to examine banks in the U.S.

Tipton’s bill sets deadlines for agency issuance of final exam reports. It also creates an independent exam review office for appeals of material supervisory determinations.

The proposal is supported by the American Bankers Association, which said it “takes a major step toward a more balanced and transparent approach” regarding regulators’ decision-making during the examination process.

Similar legislation was introduced in the last Congress and had more than 70 cosponsors, including mostly Republicans but some Democrats.

The committee defeated 26-24 an amendment by the panel’s ranking member, Rep. Maxine Waters (D-Calif.), that limited the legislation to community banks.

The Financial Choice Act, H.R. 10, which passed the House earlier this year, has provisions similar to all of the bills that were approved Dec. 13 by the committee. H.R. 10, which would repeal much of the Dodd-Frank Act, is not expected to see Senate action.

To contact the reporters on this story: Andrew Ramonas in Washington at aramonas@bloomberglaw.com; Jeff Bater in Washington at jbater@bloomberglaw.com

To contact the editor responsible for this story: Phyllis Diamond at pdiamond@bloomberglaw.com

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