S.1806 - Business Owners Protection Act of 2025 (119th Congress)
Summary
The Business Owners Protection Act of 2025 (S.1806) aims to terminate certain unused authorities of the Securities and Exchange Commission (SEC) that were established under the Dodd-Frank Wall Street Reform and Consumer Protection Act. Specifically, it targets authorities that grant the SEC discretion to establish requirements for private entities but for which no notice of proposed rulemaking or guidance document was issued before January 1, 2025. The bill requires the SEC to submit a list of terminated authorities to Congress and make it publicly available within 180 days of enactment.
Expected Effects
If enacted, the bill would reduce the SEC's regulatory reach by eliminating certain discretionary powers that have not been actively utilized. This could lead to reduced compliance burdens for private entities, particularly business owners, as intended by the bill's title. The SEC would be required to publish a list of the terminated authorities, increasing transparency.
Potential Benefits
- Reduced Regulatory Burden: Businesses may experience a decrease in compliance costs due to the termination of unused SEC authorities.
- Increased Transparency: The requirement for the SEC to publish a list of terminated authorities enhances transparency and accountability.
- Focus on Active Regulations: The SEC may be able to focus its resources on actively enforced regulations, potentially improving efficiency.
- Potential for Innovation: Reduced regulatory uncertainty could foster innovation and investment by private entities.
- Alignment with Congressional Intent: The bill reinforces Congress's oversight role in ensuring that regulatory agencies do not exceed their intended scope.
Most Benefited Areas:
Potential Disadvantages
- Potential for Increased Risk: Terminating unused authorities could remove a safety net against unforeseen financial risks or emerging threats.
- Reduced Consumer Protection: Some argue that reducing the SEC's authority, even if unused, could weaken consumer protection in the financial sector.
- Unintended Consequences: The termination of authorities could have unforeseen impacts on market stability or investor confidence.
- Difficulty in Reinstatement: If a terminated authority becomes necessary in the future, reinstating it could be a lengthy and complex process.
- Information Asymmetry: The SEC's expertise in financial regulation may not be fully appreciated by Congress, leading to potentially harmful terminations.
Constitutional Alignment
The bill aligns with the principle of legislative oversight of executive agencies, as Congress is acting to limit the scope of the SEC's authority. Article I, Section 1 of the Constitution vests all legislative powers in Congress, which includes the power to define and limit the authority of government agencies. The requirement for the SEC to report to Congress also reinforces this oversight function. However, the bill's impact on the SEC's ability to fulfill its mandate of protecting investors and maintaining fair markets could be debated in terms of promoting the general welfare.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).