House Financial Services Committee Rounds Out 2023 With Hearings on Financial Innovation, SROs

During a busy December, the House Financial Services Committee held several hearings to round out 2023 including “Fostering Financial Innovation: How Agencies Can Leverage Technology to Shape the Future of Financial Services” and “Examining the Agenda of Regulators, SROs, and Standards-Setters for Accounting, Auditing.”

The first hearing on financial innovation was organized by the Subcommittee on Digital Assets, Financial Technology and Inclusion and focused on the importance of Congress and regulatory bodies fostering financial innovation in the financial services industry. Chairman French Hill (R-AR) expressed concern that the regulatory offices dedicated to facilitating responsible innovation are preventing innovation. Ranking Member Stephen Lynch (D-MA) opined that under the Trump administration, some regulatory agencies created innovation offices as a vehicle for lowering regulatory standards.

The second hearing on Self-Regulatory Organizations (SRO) was held by the Subcommittee on Capital Markets and focused on the agendas of FINRA, the PCAOB, and FASB. Chairman Ann Wagner (R-MO) expressed concern that FINRA has strayed from its purpose and operates more like the SEC than the member-driven SRO that Congress originally established. Ranking Member Brad Sherman (D-CA) stated the crypto industry wants its own SRO so they can be in control of regulatory developments rather than analyzing what is best for the investor. Committee Ranking Member Maxine Waters (D-CA) noted that the Municipal Securities Rulemaking Board (MSRB) was not invited to testify and emphasized that reforms to the Board’s structure and mission are “long overdue.”

Click here to watch the archived hearing on financial innovation.
Click here to watch the archived video covering the agenda of SROs.