Financial Reform Watch

Published — May 23, 2011 Updated — May 19, 2014 at 12:19 pm ET

Financial reform this week: Will SEC’s final whistleblower rule require first filing internal complaint?

Tom Donohue, CEO of the U.S. Chamber of Commerce. Jacquelyn Martin/The Associated Press

Your guide to Dodd-Frank law deadlines, hearing and events for the week of May 23

Introduction

Corporate lobbyists will find out Wednesday if they were successful in pressing the Securities and Exchange Commission to weaken its proposal for a generous whistleblower bounty program.

The SEC plan released in November triggered a landslide of public comment letters and lobbying by corporate interests who complained that offering a bounty of up to 30 percent of settlements over $1 million to whistleblowers would encourage employees to go straight to the agency to report suspected misconduct. The U.S. Chamber of Commerce urged the SEC to give companies a chance to police themselves by requiring whistleblowers to first contact company-run hotlines.

New protections – and incentives – for whistleblowers were included in the Dodd-Frank reform law to strengthen the SEC’s 20-year-old program. Consumer groups say the existing SEC whistleblower program has paid out only five times over the years, for a relatively meager total of $160,000.

Earlier this month, a federal district court in New York issued the first decision related to the Dodd-Frank law whistleblower mandate. The judge ruled that a whistleblower must first provide information to the SEC to pursue a claim, unless the information falls into four narrow categories. Congress “intended to encourage whistleblowers” to report securities violations to the SEC,” the judge said in the case Patrick Egan v. TradingScreen Inc.

SEC commissioners are scheduled to vote on a final whistleblower rule at their meeting on Wednesday morning.

Other Congressional hearings, rulemaking deadlines and events related to the Dodd-Frank reform law this week:

Monday, May 23

Bank resolutions – Deadline for public comments on the Federal Deposit Insurance Corp’s proposal to define what financial companies are subject to resolution under the Dodd-Frank law, and to detail other resolution issues such as recoupment of compensation from senior executives, priorities for expenses and unsecured claims, and the process for judicial determination of claims disallowed by the receiver.

S&L regulation – Deadline for public comments on the Fed’s plan to apply its consolidated supervisory program for bank holding companies to savings and loan holding companies. The responsibility will transfer from the disbanding Office of Thrift Supervision to the Fed on July 21.

Tuesday, May 24

Derivatives slowdown – House Financial Services Committee meets to draft bill that would require the SEC and CFTC to hold public hearings and roundtables, take testimony of affected market participants, and solicit public comment before finalizing any derivatives rules. An initial version of the bill would also require the two agencies to do cost-benefit analyses and find out how much time and money would be spent by market players to develop systems and infrastructure needed to comply with any rules. Begins at 1000 ET.

Fannie Mae future – Senate Banking Committee holds a hearing on the future of housing finance and what will replace Fannie Mae and Freddie Mac. Testifying will be executives with the National Association of Realtors and the National Multi-Housing Council. Hearing begins at 1000 ET and will be webcast.

CFPB oversight – House Oversight & Government Reform subcommittee holds a hearing on oversight of the Consumer Financial Protection Bureau with testimony from Elizabeth Warren, the special adviser chosen by the White House to help set up the agency. Hearing begins at 1400 ET.

Wednesday, May 25

Whistleblowers – The Securities and Exchange Commission meets to discuss whether to adopt a final rule to protect and encourage whistleblowers, as mandated by the Dodd-Frank law. Meeting begins at 0930 ET and will be webcast.

Fannie Mae future – House Financial Services subcommittee holds a hearing on transparency and transition issues with housing finance as Fannie Mae and Freddie Mac are phased out. Begins 1400 ET and will be webcast.

Derivatives clearinghouses – Senate Banking subcommittee holds hearing on the regulation of derivatives clearinghouses. Testifying will be executives from ICE Trust, Council on Foreign Relations, CME Group Inc., State Street Global Markets, and JPMorgan Chase & Co. Hearing begins at 0930 ET and will be webcast.

Ginnie Mae and FHA – House Financial Services subcommittee holds hearing on the future role of the Federal Housing Administration and Ginnie Mae in single- and multi-family mortgage markets. Begins 1000 ET.

Thursday, May 26

FDIC future – House Financial Services subcommittee holds hearing on the role of the Federal Deposit Insurance Corp. during the financial crisis and today. Begins at 0930 ET.

Friday, May 27

Financial market utilities – Deadline for public comments on the Financial Stability Oversight Council’s proposed criteria to designate a financial market utility as systemically important under the Dodd-Frank law.

Mortgage paperwork – Deadline for feedback to the Consumer Financial Protection Bureau on its initial two-page form that would simplify mortgage disclosures when consumers buy a home. The feedback will be used for additional revisions of the form.

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