The Bond Buyer devoted an article to AFR and affiliated groups letter of opposition to HR 2827, which would roll back Dodd-Frank protections for taxpayers in municipal finance. An excerpt:
Seven groups, led by Americans for Financial Reform, urged lawmakers to vote “no” to H.R. 2827, a bill sponsored by Rep. Robert Dold, D-Ill., which would narrow the Dodd-Frank Act’s definition of municipal advisor.
The bill would define MAs as those who are engaged in writing to provide advice to municipalities and would impose a fiduciary duty on them so that they have to put their issuer clients interests first, before their own. But the bill would exempt individuals who provide advice “related to or in connection with” a number of activities, including underwriting and banking.
“The exemptions added by H.R. 2827 would certainly result in many financial entities claiming that they do not owe any fiduciary duty to respect taxpayer interests, even if they are in fact acting as advisors and not as arms-length underwriters or counterparties,” said the groups’ letter. “We urge you to oppose H.R. 2827 because it weakens accountability for financial advice to municipalities, harms communities, and is unnecessary given the authority of the [Securities and Exchange Commission] to address any outstanding issues.”
The letter was signed by American Federation of State, County & Municipal Employees, the AFL-CIO, the Consumer Federation of America, the Leadership Conference on Civil and Human Rights, Public Citizen and the United States Public Interest Research Group.
Marcus Stanley, policy director for Americans for Financial Reform, said the bill includes numerous loopholes, and that the groups are particularly worried about the exemptions for those providing advice related to underwriting and other activities.