WASHINGTON The leaders of the Securities and Exchange Commission and Commodity Futures Trading Commission said funding issues are hampering their ability to enforce new rules in the derivatives, commodities and other markets.
Mary Jo White and Gary Gensler, chairmen of the SEC and CFTC, respectively, said Congress needs to appropriate the agencies more money to help them deal with the added workload from the Dodd-Frank Act and the Jumpstart Our Business Startups Act. That includes their capacity to pursue companies that violate new rules.
"There's no question that additional resources are essential to our successful enforcement strategy," said White. "One of our specific requests in the president's budget is for additional trial attorneys, and we can't judge at this point how many additional trials we're going to have, but we already don't have enough [lawyers]."
Gensler agreed, noting that the government's $180 billion bailout of insurer AIG amounts to 600 times President Obama's most recent budget request for the agency.
"Our enforcement folks are only about 150 people, and unfortunately we're trying to make the best decisions. But often we have to delay justice because we don't have the right resources," he added.
Gensler's testimony comes as the White House is said to be actively seeking his replacement, according to press reports. Observers predicted earlier this summer that Obama would nominate Amanda Renteria, a former Senate staffer, to succeed Gensler, but Renteria withdrew her name for the position in early July.
Sen. Elizabeth Warren, D-Mass., praised Gensler's tenure at the CFTC.
"You've shown some backbone, something that I would hope would act as a model for some of the other leaders of our other regulatory agencies. You've laid out a roadmap for the CFTC to follow in years to come and really done a great job in identifying priorities - where we should be, what we should do," she said.
Still, the regulators were hesitant to provide explicit detail on when to expect upcoming rules, including several key interagency rules like the qualified residential mortgage rule and the Volcker Rule, a ban on propriety trading.
White said the SEC, along with other agencies, continues to work "quite hard and quite actively" on QRM, noting that "it's a hope and expectation that some action should be taken there in the very near term."
She also cited comments by Federal Reserve Board Governor Daniel Tarullo at an earlier banking panel hearing suggesting that the Volcker rule will be completed by the end of the year.
"I hope that's correct," White said.