More than 40 US Republicans have urged the Securities and Exchange Commission (SEC) to rescind the widely criticized SAB 121 rule.
Criticisms of SAB 121
SAB 121 was proposed without consulting regulators and deviates from established accounting standards. Republicans argue that the new rule undermines consumer protections and stifles financial innovation.
Reaction and Support
Republicans also mentioned that the SEC bypassed the notice and comment rulemaking process required by the Administrative Procedure Act. The letter states that the rule fails to reflect the legal and economic obligations of the custodian, increasing risks for consumers.
Background of the Situation
The SAB 121 repeal bill was vetoed by President Joe Biden in June, despite receiving bipartisan support. The House failed to overturn the veto, falling 60 votes short of moving the matter to the Senate.
The letter, signed by over 40 Republican members, was sent ahead of a Financial Services Committee hearing scheduled for September 24, where discussions regarding SAB 121 are expected to take place.
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