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The House Financial Services Committee (HFSC), led by chairman Spencer Bacchus (R-LA), introduced legislation yesterday that may lead the Financial Industry Regulatory Authority (FINRA) to become the self-regulatory organization (SRO) for retail investment advisors. In 2011, only 8% of investment advisors underwent SEC examination, compared to 58% of broker-dealers, according to an HFSC press release.  The Investment Advisors Act of 1940 would be amended by the legislation to enable the creation of National Investment Advisor Associations (NIAAs). NIAAs would register with the SEC and serve under SEC oversight.

On Wednesday Rep. Spencer Bachus (R – Alabama) was elected by the House Republican Conference to serve as chairman of the House Financial Services Committee (HFSC) for the 112 Congress. He will be replacing Rep. Barney Frank (D-Masschussetts) as chairman when Congress meets in January.

Bachus says the new leadership plans to reinvigorate the committee’s oversight activities. “As Chairman of the Committee, I will honor our pledge to America and act on the priorities the American people delivered us last November,” he said in a statement. “We are going to protect taxpayers by ending ‘too big to fail’ and the Administration’s unlimited bailout of Fannie Mae and Freddie Mac. We are committed to going title by title through the 2,300 page Dodd Frank Act to correct, replace, or repeal the job killing provisions that unnecessarily punish small businesses and community banks that did nothing to cause the financial crisis.”

U.S. Rep. Spencer Bachus (R., Ala.) was nominated by a 34-member committee of senior House Republicans to chair the House Financial Services Committee. Rep. Ed Royce (R. Calif) had also been in the running, but Bachus has been the top Republican serving on the panel for the past four years and has been the favorite to take over the committee from current Chairman Barney Frank (D., Mass) when Republicans assume control of the House in January. He still must be approved by the wider conference on Wednesday, December 8, but GOP leadership aides say the party’s lawmakers have always endorsed a committee chair recommended by a steering committee.

Bachus has been an advocate of capping taxpayer exposure to Fannie Mae and Freddie Mac, and would like to see the two agencies either placed into liquidation or be forced to compete in the private market. According to aides working for Bachus, he plans to conduct strict oversight of the Obama administration during the implementation of the financial regulatory law mandates. During the process of passing the financial services reforms, Bachus was initially out of favor with Republicans in 2008 because he seemed to be supporting the financial services bail-out without first clearing his position with party leaders, but later, he was instrumental in effectively preventing the Democrats from concluding work on the bill too quickly.