While attention on Capitol Hill has understandably been focused on the GOP’s Health Care efforts and the hearings for Supreme Court Nominee Neil Gorsuch, the Senate Banking Committee held the nomination for President Trump’s pick for SEC Chair this week. During the hearing, despite repeated questions and pressing, Mr. Clayton deftly, yet unsurprisingly, avoided specifically identifying any provisions within the Dodd-Frank Act which need revision, stating simply “Dodd-Frank should be looked at, in particular rules that have been in place as to whether they are achieving their objectives effectively.” Notably, Mr. Clayton declined to state his opinion on pay ratio, even when specifically asked.
The bulk of Mr. Clayton’s remarks at the hearing Thursday focused on revitalizing the U.S. public company market which were suffering from what he characterized as the fading attractiveness to foreign companies – largely in part due to regulation. Mr. Clayton emphasized the need to revisit the myriad of complex rules, while still maintaining investor protections, to increase the attractiveness of becoming a U.S. public company, citing the decline in U.S. public offerings. Mr. Clayton’s testimony drew immediate protest and opposition from Senators Bernie Sanders and Elizabeth Warren who held a campaign-style rally criticizing Mr. Clayton for his Wall Street ties. In his remarks, Senator Sanders decried Clayton’s representation of pharmaceutical companies which have raised the prices of drugs. Despite the opposition of Mr. Sanders and Ms. Warren, Democrats cannot stop Mr. Clayton’s nomination without convincing three Republicans to oppose him, which is unlikely.