WASHINGTON Rep. Richard H. Baker on Thursday called for more openness in the rulemaking process of government agencies, starting with a pilot program at the Securities and Exchange Commission.
In a speech to the Securities Traders Association, the chairman of the Financial Services subcommittee on capital markets criticized the SEC for making some decisions behind closed doors, a practice called a seriatum vote. Further, he complained that the law prohibits regulators from discussing rule-writing with lawmakers.
If I were to have called the Federal Reserve six months ago when they were writing the merchant banking capital rules and say, Alan this is Richard, how are you? Tell me what you all are going to do on the rule on merchant banking, he couldnt respond, Rep. Baker said. That would have been helpful because, he said, the Feds handling of merchant banking rules was an example of a regulator meeting secretly and coming up with mystical interpretation of the legislative intent and putting it into law by publication We cant know about rule-writing or have any communication until it is done.
The Louisiana Republican said he does not yet have specifics as to how his plan would work, and said he would want to try it out at the SEC before applying it to the federal bank regulatory agencies.
Senate Banking Committee Chairman Phil Gramm, who addressed the same group, was lukewarm to opening the rulemaking process. To a degree sunshine is a clearly beneficial thing, but there is something lost when you cant close the door and be honest and discuss things, the Texas Republican said. My concern now is about the fundamental structure of our laws and regulations. That is more important to me than how open the meetings are.