Blog co-authored with Ken Monahan, director of international trade policy.
More than six years since Congress approved the Dodd-Frank Wall Street Reform and Consumer Protection Act, the House Financial Services Committee on Tuesday took a step to modify or repeal various provisions from that law. The Financial CHOICE Act (H.R. 5983), approved by the committee, specifically addresses some of the provisions that manufacturers have been raising concerns with for years, including the pay ratio and conflict minerals requirements.
The National Association of Manufacturers (NAM) has consistently pushed back on the unnecessary and unworkable pay ratio requirement, which was finalized by the Securities and Exchange Commission (SEC) in August 2015 and requires public companies to regularly disclose the ratio of employees’ median pay to the compensation of a company’s chief executive. Complying with the rule will be costly and burdensome to manufacturers, without adding value for shareholders. Instead, shareholders will be looking at a single statistic that oversimplifies the pay practices of manufacturing businesses without taking into consideration the complexities that may skew the number, such as a significant presence in countries with a lower cost of living.
We have also consistently underscored that the conflict minerals disclosure requirements in Dodd-Frank pose a huge financial and reporting burden, and potentially a huge auditing burden, on many manufacturers. These costs to manufacturers stem from the breadth of use of the relevant minerals (tungsten, tantalum, tin and gold) throughout the manufacturing process and the depth, complexity and constantly evolving nature of modern supply chains, which, for many companies, include thousands of multitier suppliers. The requirements also affect thousands of small and medium-sized companies not subject to SEC reporting because they supply large, publicly traded companies and are asked by those issuers to conduct the due diligence required by the rule.
For these reasons and others that we’ve raised previously, including in a letter to the SEC in July, the NAM is pleased that the committee recognized the need to fully repeal the burdensome pay ratio and conflict mineral required disclosures under Dodd-Frank and to replace or repeal other provisions problematic for manufacturers in the United States.
Before joining the NAM, Crooks served as senior manager of government affairs for Financial Executives International, where she advocated on behalf of the association’s membership of senior-level business executives on tax, corporate treasury, pension and benefit issues. Previously, she worked as a legislative assistant to Rep. Michael Castle (R-DE), a senior member of the House Committee on Financial Services. Christina handled financial services issues for the Congressman during consideration of the Dodd-Frank Act, and also worked on small business and judiciary issues. Christina earned a B.A. in Political Science from the University of Delaware and a M.A. in Political Science from American University.
Latest posts by Christina Crooks (see all)
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