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Highlights
- Rep. McHenry urges override of Biden's veto on SEC rule SAB 121, citing bipartisan support.
- H.J. Res. 109 backed by both parties aims to revise US digital asset policy.
- Mike Flood criticizes SEC's overreach on bank digital asset custody with SAB 121.
Representative Patrick McHenry, Chairman of the House Financial Services Committee, has made a strong case for overturning President Biden’s veto of a resolution that aimed to block the Securities and Exchange Commission’s Staff Accounting Bulletin No. 121 (SAB 121).
Rep McHenry Calls for Overturn of Biden Veto
During a recent session on the House, Representative Patrick McHenry engaged fellow Republicans in a debate when they were debating the President’s veto of H. J. Res. 109. This resolution aims at disapproving the SEC’s rule on Staff Accounting Bulletin No. 121 relating to banks’ digital asset custody.
The debate underscored the bipartisan nature of the disapproval that previously garnered wide support in both the House and Senate. McHenry stressed that the resolution was vital in revising the US policy on digital assets and encouraged his colleagues to vote in favor of the motion to override the veto.
#WATCH: Chairman @PatrickMcHenry in support of @HouseGOP’s message to override the veto of the bipartisan H.J.Res. 109:
"This Administration would rather play politics and side with power hungry bureaucrats over the American people."
Read more 🔗https://t.co/l10uFxrc1r
📺 👇 pic.twitter.com/oe50k3aCdt
— Financial Services GOP (@FinancialCmte) July 10, 2024
In his speech, McHenry took a swipe at the present administration for supporting bureaucratic decisions that, in his opinion, work against the people’s best interest. He mentioned the general support of the original Congressional Review Act (CRA) resolution and the subsequent passage of the Financial Innovation and Technology (FIT) for the 21st Century Act that endorsed the repeal of SAB 121.
Bipartisan Support and Legislative Context
The legislative journey of the resolution, H.J. Res. 109, reflects significant bipartisan cooperation. . At first, both houses of Congress approved the resolution with a large margin, a trend that is also observed in the recent passage of the FIT21 Act.
Moreover, this Act which contained provisions concerning the digital asset market structures was also passed with the support of many members of the two parties including 71 from the President’s own party.
Therefore, this bipartisan position on SAB 121 suggests that there is a coordinated push by legislators to alter the SEC’s stance on the regulation of digital assets. McHenry and other critics of SAB 121 have noted that the rule unduly burdens banks, restricts consumer choices for asset custody, and alters long-standing industry norms without clear rationale.
Mike Flood Criticizes SEC Overreach
In addition, during the debate, Representative Mike Flood also expressed a negative view towards the implementation of SAB 121 by the SEC. He noted that the SEC’s actions under Gensler are beyond its scope in that other bodies like the Federal Reserve and the Treasury Department should handle such roles.
Flood said,
“The SEC was caught with its hand in the cookie jar. They have gone too far in a very obvious manner that is against the best interest of investors. SAB 121 is not a political issue; it is simply a bad rule.”
Flood argued that SAB 121 weakens the conventional bank custody frameworks through the adoption of measures that are inapplicable to the banking sector’s operations.
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