The U.S. House of Representatives voted on Wednesday to repeal a Securities and Exchange Commission rule that requires American energy companies to disclose payments made to foreign governments for the commercial development of oil, natural gas or minerals.
The House voted 235-187 to repeal the Resource Extraction Act, which was mandated by the Dodd-Frank Act and went into effect in June 2016 after an earlier version was struck down by a federal court. The bill to repeal was sponsored by U.S. Rep. Bill Huizenga (R-MI), chairman of the Financial Services Subcommittee on Capital Markets, Securities and Investment.
“Today’s vote helps reset the regulatory process. For too long, regulators have saddled U.S. companies with burdensome regulation that provide little to no benefit while putting them at a competitive disadvantage on the global stage,” Huizenga said. “By having Congress send the SEC back to the drawing board it demonstrates that Congress is serious about strengthening the economy, boosting private sector job creation, and helping American workers.”
Proponents of the repeal say the rule put American public companies at a disadvantage against many foreign competitors, including state-owned companies in China and Russia. Also, they say it will cost American public companies nearly $600 million each year to comply with the regulation, according to estimates from the Securities and Exchange Commission (SEC).
“The economic opportunities of millions of struggling Americans aren’t helped by top-down, political regulations that give foreign companies an advantage over American public companies, but that’s exactly what this SEC regulation does,” House Financial Services Committee Chairman Jeb Hensarling (R-TX) said. “The SEC’s rule forces publicly traded American energy companies to disclose proprietary information, giving their foreign competitors access to valuable information.”
Acting SEC Chairman Michael Piwowar stated during the re-proposal of the SEC’s rule that it “neither reforms Wall Street nor provides consumer protection and it is wholly unrelated, and largely contrary, to the commission’s core mission.”