Scott Slams SEC’s Climate Disclosure Rule: “Federal overreach at its worst.”
Washington, D.C. – Ranking Member Tim Scott (R-S.C.), the top Republican on the Senate Committee on Banking, Housing, and Urban Affairs, today slammed the Securities and Exchange Commission’s (SEC) long-awaited climate disclosure rule – which exceeds the SEC’s scope of authority and will bury public companies in paperwork, raise costs for consumers, and stifle economic opportunity. Ranking Member Scott stated that he intends to use the Congressional Review Act process to fight the rule and its implementation.
“Ignoring the concerns of Americans, small business owners, and stakeholders from across the country, Chair Gensler pressed forward with a final rule that falls outside his agency’s authority and does far more to advance the Biden administration’s far-Left climate agenda than uphold the SEC’s mandate to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation. The last time I checked, the SEC is a securities regulator that does not employ climate scientists, and it clearly has acted without regard to the onerous burdens placed on businesses of all sizes – a blatant disregard that will harm Main Street the most. This is federal overreach at its worst, and as the lead Republican on the Senate Banking Committee, I intend to utilize the Congressional Review Act to fight this rule and protect economic opportunity for all Americans.”
BACKGROUND
Under Chair Gensler, the SEC has pursued one of the most aggressive regulatory agendas in the agency’s history – with the agency on track to propose and finalize over 60 rules with limited public comment periods and supported by inadequate cost-benefit analysis. Ranking Member Scott has continued to push back on the widespread impact and confusion created by agency’s proposed rules on our capital markets, American retirement savers, and businesses of all sizes through rigorous congressional oversight.
In February of 2023, Ranking Member Scott, Chairman of the House Financial Services Committee, Patrick McHenry (R-NC), and Chairman of the Subcommittee on Oversight and Investigations, Bill Huizenga (R-MI), sent a letter to Chair Gary Gensler demanding records and other information related to the proposed climate disclosure rule, including responses to previous requests by numerous members of both the House and the Senate that Chair Gensler has failed to provide. The Republican leaders emphasized that the proposed rule exceeds the SEC’s mission, expertise, and authority and – if finalized in any form – will unnecessarily harm consumers, workers, and the U.S. economy.
Last June, Ranking Member Scott teamed up with the Chairman of the House Committee on Oversight and Accountability, Rep. James Comer (R-KY), to demand answers from the SEC about its role in facilitating the European Union’s (E.U.) progressive climate agenda, which could be imposed on American companies. Despite continued requests, the SEC has failed to produce documents around their involvement in the E.U.’s climate-related disclosure policies, as well as labor and social justice initiatives, that would harm a broad range of U.S. businesses and weaken U.S. capital markets. The SEC's actions and repeated stonewalling of congressional oversight are especially concerning given that the application of E.U. policies would circumvent U.S. regulatory and legal processes and allow foreign governments to dictate climate and economic policy to U.S. companies.
At a hearing in September, the Ranking Member pressed Chair Gensler about the agency’s aggressive rulemaking, lack of transparency, and unresponsiveness to congressional inquiries. Ranking Member Scott had called for the Chair to testify since February. Following the hearing, Capitol Account highlighted Chair Gensler’s refusal to respond to congressional oversight requests from Senate Banking Committee minority members, writing, “The friction, which has been building for months, spilled out publicly (though a bit obliquely) last week when the SEC chief appeared before the banking committee. In his opening remarks, Scott told Gensler that he had ‘serious concerns’ about how he is leading the agency…Later, Republican Mike Rounds asked Gensler whether inquiries from lawmakers in the minority party have been treated differently than submissions from those in the majority. Gensler largely sidestepped the question, but suggested the agency is more likely to respond to document requests from committee chairs.”
The Ranking Member also led a group of Banking Committee Republicans last May warning Chair Gensler about the effects of the SEC’s rulemaking on small and emerging businesses. In the letter, the senators called out the agency for failing to account for how these regulations, including the climate disclosure rule, will undermine the strength of U.S. capital markets and how they will make it more challenging to start and grow a business in America.
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