HFS Subcommittee Chair Huizenga Says SEC Has No Authority to Require Climate Disclosure
Commentary by Steven Lofchie
House Financial Services Subcommittee on Oversight and Investigations Chair Bill Huizenga (R-MI) asserted that the SEC overstepped its authority by "advancing a progressive climate agenda." Mr. Huizenga argued that even if it the agency had such authority, the SEC's rulemaking process was defective.
At a Subcommittee oversight hearing, Mr. Huizenga asserted that the SEC (i) overstepped its authority by "advancing a progressive climate agenda," which is not its intended role, (ii) underestimated the rule's cost, (iii) relied on biased sources for rulemaking justification, (iv) lacked congressional authorization (which, he maintained, was denied in previous similar SEC actions) and (v) lacked a thorough analysis of the impact on small businesses for compliance costs.
Mr. Huizenga also highlighted the challenges faced in obtaining comprehensive information from the SEC. He criticized the delay in responses to the Subcommittee's requests for information, calling the SEC's response "insufficient and uncooperative."
Mr. Huizenga called for robust Congressional oversight, more detailed unbiased economic analysis of the rule's impact and reevaluation of the SEC's role to align more closely with its original mandate to focus on investor protections and efficient markets.
Commentary
Beyond the concerns raised about the SEC rulemaking on climate disclosure, Mr. Huizenga suggested that many of the rules adopted by the SEC in recent years likely will be vacated by court action. This seems quite likely, not only if there is a change in Administration, but also because many of these rules have been adopted by a 3-2 vote, with the dissenting Commissioners objecting both to the substance of the adopted rules and to the rulemaking process.
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