HR-9434-119
Referred to the House Committee on Financial Services.
Sponsored by Young Kim (R-CA)
What it does
This bill would amend the Securities Act of 1933, the Securities Exchange Act of 1934, the Investment Company Act of 1940, and the Investment Advisers Act of 1940 to require the SEC to evaluate whether a proposed rule serves the public interest by considering it together with other related recent or proposed rules, not just in isolation. It does not change any specific existing rule, create new enforcement authority, or set a compliance deadline.
Who benefits
Broker-dealers, investment advisers, mutual funds, and public companies subject to SEC rulemaking, who could benefit from analysis that accounts for the combined compliance burden of overlapping rules. Industry trade groups that have long argued regulatory costs stack up unaccounted for across multiple rulemakings.
Who is hurt
Investor-protection advocates and some consumer groups who may see this as slowing or complicating the SEC's ability to finalize individual rules quickly. The SEC itself would bear added administrative burden to conduct cumulative-impact analysis, potentially delaying rule finalization and increasing litigation risk if the analysis is challenged as inadequate.
Supporters argue
Supporters argue that agencies sometimes evaluate each rule in isolation without accounting for how dozens of overlapping requirements compound compliance costs for smaller firms, and that requiring cumulative analysis produces more realistic cost-benefit assessments. They contend this modest procedural change would improve rulemaking quality without stripping the SEC of any substantive authority.
Opponents argue
Opponents argue that requiring cumulative-effects analysis adds a new procedural hurdle that could slow investor-protection rules, particularly in fast-moving markets where delay itself carries risk. They contend the vague "related rules" standard invites litigation from regulated entities seeking to challenge or stall rules on procedural grounds rather than their substantive merits.
Constitutional context
This bill operates within Congress's Article I authority to define the statutory standards agencies like the SEC must apply, and post-Loper Bright v. Raimondo (2024), courts would independently assess whether the SEC's cumulative-effects analysis satisfies this new statutory requirement rather than deferring to the agency's interpretation.
Checks and balances
Congress would gain a procedural check on SEC rulemaking discretion by statutorily narrowing what counts as serving the "public interest," while courts would review SEC compliance with the new standard under post-Chevron independent judgment.
Historical precedent
Similar cumulative-impact or "regulatory burden" review requirements have been proposed for other agencies, such as periodic legislative efforts to require cost-benefit or cumulative-impact analysis in banking and environmental rulemaking, though none of these is a direct precedent specific to securities law.