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House Financial Services Panel Takes SEC to Task on Rulemaking Pace and Crypto Policy
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Summary
In a full-commission oversight hearing, House Financial Services members clashed over SEC Chair Gary Gensler's rulemaking agenda, calling for clearer statutory direction on digital assets and criticizing the agency's use of enforcement in place of rulemaking; the commission defended its actions as investor protection.
The House Financial Services Committee convened a full-commission oversight hearing on the Securities and Exchange Commission that turned into a broad critique of SEC Chair Gary Gensler's tenure and agenda. Chair McHenry opened the hearing by saying the agency has 'become a rogue agency' under its current leadership and listed recent judicial reversals of SEC rules as a sign the agency is overreaching. "Under Chair Gensler, the SEC has become a rogue agency," Chairman McHenry said during his opening remarks.
Ranking Member Maxine Waters began by praising the SEC's enforcement record and urging the panel to work toward bipartisan solutions, including a 'grand bargain' on stablecoins this Congress. "The SEC has lived up to its mission of protecting investors and ensuring our capital markets remain the envy of the world," Ranking Member Waters said.
Chair Gary Gensler, testifying for the commission, framed the agency's work as protecting investors across U.S. capital markets and described a range of recent actions and reforms, from shortening settlement cycles to modernizing market structure. Gensler said commissioners were present to provide individual views and that the body would avoid deliberating on matters pending before the agency.
Members pressed the SEC on multiple fronts. Republican members repeatedly criticized the breadth and speed of the commission's rulemaking, citing court setbacks for rules addressing proxy advisers, private funds disclosure, and other proposals. Democratic members argued the SEC's reforms improved transparency and investor protections. A recurring theme was calls for better planning and longer comment periods; Commissioner Mark Uyeda and others recommended restoring a default 60-day public comment period for complex proposals.
On market structure, lawmakers and the commission discussed recent steps such as shortening settlement to T+1 and allowing tighter quoting increments. Gensler defended the moves as intended to lower costs and update 20-year-old rules. Multiple members, including Commissioner Hester Peirce in questioning, said rulemaking should be used more often than ad hoc enforcement when clarity for markets is needed.
The hearing closed with requests for written follow-up and the committee adjourned after recognizing all members may submit additional material for the record. Members stressed that technical assistance and clearer statutory guidance from Congress would help resolve persistent questions, particularly around digital assets.
