Sen. Richard Blumenthal, D-Conn., is leading a push to use a congressional budget reconciliation bill to give the administration the authority to direct the Securities and Exchange Commission to impose a rule to crack down on the country’s $3.3 trillion bubble, but he is still awaiting a response from the president.
The SEC rule, called the “Goldman Rule,” requires companies to disclose their total assets and liabilities, and requires them to disclose any risks of bankruptcy or insolvency, as well as their plans for restructuring.
The law also requires companies with at least $1 billion in market cap to report their total annual revenue, profit, and expenses for the previous fiscal year.
The rule has been challenged on several fronts, with the SEC and other regulators saying it is outdated and lacks teeth, while the companies have said it would boost transparency and make it easier for regulators to determine whether a company is in default.
Blumenthal said he has been working on legislation to allow the SEC to enforce the rule, as long as it is done in a way that would also allow companies to avoid the risk of fines and sanctions.
But in an interview with CNBC’s “Squawk Box” on Thursday, Blumenthal said he would need to convince Democratic leaders to support the legislation to have any chance of passing.
He noted that some of the GOP senators who have said they will not support the rule are from states where it was passed.
“There are some senators who are going to have to be really hard pressed to support it,” Blumenthal said.
Blankenship said he is also considering legislation that would allow for a temporary extension of the SEC rule if Congress approves a temporary bill to do so.
“The problem with this rule is it’s a two-year statute, it’s expired, it needs to be renewed every two years, and it’s just a massive regulatory drag on the economy,” Blumenthal added.
“I think we can come to an agreement where it will be renewed, but there’s a good chance that it will not be renewed.
There’s a lot of bipartisan support for that, but we can’t have this rule being enforced every two or three years.”
Sen. Richard Burr, R-N.C., said on the same program that Blumenthal should take up his bill, but said the administration should also act.
“It’s going to be difficult to pass that, and I don’t think we should let this bubble go unchecked,” Burr said.
“We need to make sure that the financial system works for the American people, and we need to address the bubble in the economy.”
Blumenthal has been a strong supporter of Dodd-Frank financial reforms and the efforts of the White House to make the financial markets more transparent.
He also has pushed for legislation to reinstate a financial rescue program that was terminated by the White Congress.
Blacksburg, Va.-based U.S. Chamber of Commerce President Rick Manning called Blumenthal’s effort “one more step toward putting America’s economy back on track,” noting that his legislation would also increase accountability by requiring financial institutions to disclose financial information.
“Our industry will never get back to where it should be without greater transparency,” Manning said in a statement.
“If there is a silver lining to this story, it is that President Trump is clearly committed to bringing more transparency to the financial services industry.”