The head of the Securities and Exchange Commission said Tuesday that the agency will have to shift resources from other "equally deserving areas" to approve rules from sweeping bank reform legislation.
"We are resource constrained at the SEC," said Chairman Mary Schapiro. "While we will meet our deadlines, we will be shifting resources from other areas that are deeply deserving of our time and attention right now."
She said that the SEC has roughly 105 rules to write, 20 studies to write and five offices to staff based on the Dodd-Frank statute. Schapiro said that it is an "enormous burden," adding that the SEC has an agenda of issues unrelated to Dodd-Frank that it was already engaged in, including reforms to the market structure in response to the flash crash of May 6.
Schapiro said that the biggest challenges are in areas where the SEC has never regulated before, such as new reporting and oversight rules for trillions of dollars in securities-based over-the-counter derivatives. She said that the SEC is also required by Dodd-Frank to create a new regulatory regime that would have hedge fund managers open up their books to periodic examinations by SEC examiners.
In response to questions on the foreclosure moratorium, Schapiro said the SEC is moving to adopt rules on mortgage-backed securities disclosure.
The Federal Reserve, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp. are conducting a review of the foreclosure practices, governance and documentation at the major bank mortgage servicers after some major lenders halted foreclosures amid controversy over so-called robo-signers. These are often employees of mortgage lenders or servicers who submit affidavits supporting foreclosures that have to be cleared by judges in many states. "Whenever there are suggestions that there may have been any kinds of issues with respect to disclosure, misrepresentations or omissions we are always looking at that kind of context," Schapiro said.
