SIFMA Testimony Before the House Financial Services Committee Hearing “Dodd-Frank Turns 15: Lessons Learned and the Road Ahead”

Washington, D.C., July 15, 2025 - Kenneth E. Bentsen, Jr., President and CEO of SIFMA, today testified before the House Financial Services Committee at a hearing titled "Dodd-Frank Turns 15: Lessons Learned and the Road Ahead." Bentsen highlighted the resilience of U.S. capital markets while urging policymakers to reassess and recalibrate aspects of the regulatory framework to better balance stability with economic growth.

"The U.S. securities markets are the deepest and most liquid in the world. They are also the envy of the world," Bentsen said in the testimony. "Vibrant and healthy capital markets allow companies to invest, spurring job creation and economic growth. Therefore, it is critical that our policymakers tailor regulations not just to ensure transparency and protect investors, but to do so without unnecessarily disrupting or constraining the role capital markets play in fostering economic growth."

"Though many of the Dodd-Frank reforms have made the U.S. financial system more resilient and less prone to shocks, they are not without cost," he continued. "We believe that appropriately tailored regulation should balance the dual goals of enhancing financial stability and investor protection while supporting the flow of investment capital to end-users who deploy that capital to create jobs and grow the economy."

The testimony highlighted areas where review and recalibration are particularly warranted, including:

• Recalibrating overall capital levels and addressing overlaps with capital and stress tests. It is crucial that regulators take a holistic view on any forthcoming rulemakings and finalize them in conjunction with one another.
• Regulators need to account for the interactions - and overlaps - between the Global Market Shock & the Fundamental Review of the Trading Book.
• It is crucial that greater credit be given for diversification in the FRTB to better align it with underlying risks and reward good risk management practices.
• Any re-proposal should include revisions to facilitate banks' ability to use internal models for market risk, given that internal models better reflect firms' risk profiles.
• OTC derivatives transactions with commercial end-users need to receive more favorable treatment in the final U.S. rule, in line with the approach taken by the EU.
• Securitized products provide significant economic benefits by lowering borrowing costs on a wide variety of consumer and business loans and help banks prudently manage their risks. The original Basel III Endgame proposal would have created perverse risk incentives that would have discouraged large banks from engaging in securitization activities.
• More needs to be done to conform with both the spirit and letter of the 2018 tailoring law passed by Congress to ensure that enhanced prudential standards are proportionate to the size and risks posed by the U.S. operations of FBOs and regional banks.
• Given that the post-crisis financial reforms have dramatically increased capital requirements for these banks and that a minimum floor is already included in the Basel III Endgame standards, the Collins Amendment should be reexamined and reformed. At a minimum, we recommend that U.S. Treasuries and central bank reserves be exempted from the Collins Amendment's floor on leverage calculations

Several SEC rules finalized in the last administration under authorities conferred by Dodd-Frank should also be reviewed and revised:

• The SEC's securities lending reporting under Rule 10c-1a should be revised to clearly limit the scope of the rule to traditional securities lending arrangements and to otherwise coordinate any public disclosure with the short reporting rule to protect market participants who are short selling, should the rule survive a pending court challenge.
• The SEC's short selling rule under Rule 13f-2 should be revised to significantly scale back the granularity of reporting obligations and to better coordinate with the sec lending reporting rule just discussed.

"The U.S. financial system is significantly stronger and more resilient than it was before Dodd-Frank was passed in 2010. This is a good thing. However, SIFMA believes that it is now appropriate to evaluate whether certain components of the regulatory framework developed under mandates from the Dodd-Frank Act are excessively conservative and impose costs on the U.S. economy, our financial markets, and on Main Street that outweigh their benefits," Bentsen concluded in the testimony. "We appreciate the Committee's interest in exploring these important questions on this fifteenth anniversary of Dodd-Frank."

The full testimony expands on these issues in more detail and can be found here.

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SIFMA is the leading trade association for broker-dealers, investment banks and asset managers operating in the U.S. and global capital markets. On behalf of our industry's nearly 1 million employees, we advocate for legislation, regulation and business policy, affecting retail and institutional investors, equity and fixed income markets and related products and services. We serve as an industry coordinating body to promote fair and orderly markets, informed regulatory compliance, and efficient market operations and resiliency. We also provide a forum for industry policy and professional development. SIFMA, with offices in New York and Washington, D.C., is the U.S. regional member of the Global Financial Markets Association (GFMA). For more information, visit https://http://www.sifma.org.