WASHINGTON — Reps. Jeb Hensarling, R-Texas, chairman of the House Financial Services Committee, and Scott Garrett, R-N.J., are warning that the Securities and Exchange Commission failed to conduct an economic analysis of the Volcker Rule, violating federal law.

The lawmakers on Monday requested a legal justification for the decision to forgo the analysis, in a letter to Mary Jo White, chairman of the SEC. The agency has come under fire several times in recent years over the issue of its cost-benefit analyses for new rules. Regulators have said the SEC didn’t provide a separate analysis under the Volcker Rule because the law they wrote the rule under didn’t require it, though it’s possible that decision could spur a legal challenge.

"Conducting an economic analysis is a well-established legal requirement and both the Administrative Procedures Act and the Federal securities laws require the Commission to conduct a detailed analysis of the likely economic consequences of its rules and to connect these consequences to efficiency, competition and capital formation," the lawmakers said in their letter.

The letter also cites a 2011 decision by the U.S. Court of Appeals for the District of Columbia Circuit that knocked down the agency’s proxy access rule on the grounds that the SEC failed to conduct a thorough enough economic analysis.

"At 932 pages, there is little doubt the Volcker Rule will have a significant impact on the U.S. capital markets and the broader economy," the letter adds.

The Volcker Rule, a ban on proprietary trading, was issued by the five banking agencies last month.

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