The Securities and Exchange Commission needs its commissioner vacancies filled faster, a blue ribbon panel urged Thursday.
“The importance of having well-qualified regulators in place was underscored by the 2007-2008 financial crisis,” the Bipartisan Policy Center said in a new report.
The study noted that since 1988 it has taken Congress and the White House on average nearly 10 months to get the SEC back to its full five commissioners: nearly three times as long as it did in the regulator’s nearly half a century history before then.
Four times since 1995, the SEC has endured more than 300 days with only two commissioners.
When it’s only those two, they can’t meet in an elevator or anywhere else to discuss SEC business without it being a public meeting.
That means when it’s three or fewer commissioners, one can effectively stop the SEC from acting by simply not attending a meeting, the study noted. Though it wasn’t mentioned in the report, a commissioner’s absence can hinder SEC chairs from bringing up proposals the commissioner doesn’t like.
Michael Piwowar says he did not use that power against Chairman Mary Jo White when he was the lone Republican commissioner, but the threat had to be on her mind.
The difficulties the SEC has without all its commissioners go deeper, the report says.
“When agencies are functioning with a full complement of leadership, much of the business done … is hashed out behind the scenes,” the report says. “Ideas and policies should be developed and refined before being submitted to the public. Informal interaction between members of commissions and boards helps to establish working relationships and better understanding of others’ points of view.”
If it continues to take longer to fill vacancies (something also happening to varying degrees at the Federal Reserve, the Commodity Futures Trading Commission and the Federal Housing Finance Agency), the Bipartisan Policy Center said this will threaten the ability of regulators to perform their functions.