Senate Banking's securities subcommittee is expected to hold a hearing on the Securities and Exchange Commission's recent moves affecting bank loan-loss reserving and invite agency Chairman Arthur Levitt to testify.
House Banking's financial institutions subcommittee held a similar hearing June 16; SEC General Counsel Harvey J. Goldschmid testified.
But Sen. Richard C. Shelby, R-Ala., on Monday specifically requested Mr. Levitt as a witness.
"A public hearing will give Chairman Levitt an opportunity to explain the actions of the SEC and provide us with the same comprehensive policy analysis they used to justify taking action against" SunTrust Banks Inc. and Bankers Trust Co., Sen. Shelby wrote in a letter to Chairman Rod Grams of the securities subcommittee
The SEC's concerns that SunTrust's loss reserves were too high delayed its merger with Crestar Financial Corp. last year. The Atlanta-based banking company eventually agreed to restate earnings and reduce its reserves by $100 million. Bankers Trust, which has just merged with Deutsche Bank, announced in May that its loss reserving was being investigated by the SEC.
"Bankers across the country are concerned about the recent actions of the SEC and have complained about the uncertainty those actions have created," Sen. Shelby wrote.