Early last month, hundreds of NTEU members from around the country, representing more than two dozen federal agencies, gathered for the Union’s 2010 Legislative Conference. Representing the SEC at this year’s conference were Chapter 293 President Greg Gilman, Chapter 293 Legislative Coordinators Dan Barry (BRO) and Bill Friar (Corp Fin), Chapter 293 Executive Board members Joel Crepea (NYRO), Jerry Kohn (CHRO) and Cate Whiting (SFRO), and Chapter 293 members Kate McHale and Rebecca Moore.

In light of financial regulatory reform legislation that is currently being considered by Congress, this year’s Legislative Conference was particularly important for the NTEU-represented financial regulatory agencies: SEC; OCC; and FDIC. For that reason, before the conference, Chapter 293 President Greg Gilman led an effort to join forces with chapter presidents from the other two agencies to organize their conference representatives to cooperate on a national agenda for the financial regulatory agencies. The resulting unified agenda consisted of three primary issues: (1) an independently funded SEC, free from the appropriations process; (2) collective bargaining rights over pay and benefits for the OCC; and (3) the right for FDIC employees who previously worked as temporary liquidation employees to purchase retirement credits for the years in which they were classified as “temporary employees.”

With this agreed upon agenda in hand, dozens of members from these agencies fanned out across Capitol Hill to visit members of Congress with their unified message. Congressional members from the Senate Banking Committee and the House Financial Services Committee were particularly sought after, given their work on the financial regulatory reform legislation currently making its way through Congress. By the end of the conference, though, literally hundreds of Senators, Representatives and their staffers had heard SEC, OCC and FDIC representatives advocating for their agencies.

With respect to the SEC, the representatives noted that the SEC is virtually the only federal financial regulatory agency that is not independently funded. Indeed, FDIC, OCC, the Federal Reserve, the National Credit Union Administration, the Office of Thrift Supervision and the Federal Housing Agency all fund their operations through the fees that they collect (as would the proposed new Consumer Financial Protection Agency). By contrast, the SEC turns over to the Treasury all of the fees that it collects and its budget is then decided via the appropriations process.

The SEC collects sufficient fees to cover the entire cost of its operations. In fact, the agency raises millions more dollars every year in registration and transaction fees than it receives from Congress during the appropriations process. For example, in 2007, the SEC brought in $1.54 billion in fees but it secured only $881.6 million in funding. Similarly, although the President’s FY 2011 $1.26 billion budget for the SEC represented a significant increase over recent budgets, it also estimated that the SEC will collect $1.74 billion in fees, 38% more than the requested expenditure.

As an independently funded agency, the SEC would be much better able protect the interests of investors by hiring the experienced professionals it needs, instituting the compensation and retention policies necessary to retain those employees, and developing the new technology upgrades that it requires.

NTEU representatives urged members of Congress to consider the fact that with a staff of approximately 3,800, the SEC is currently responsible for more than 35,000 registrants, including about 11,500 investment advisers, 7,800 mutual funds, 5,400 broker-dealers, and more than 10,000 public companies, as well as transfer agents, clearing agencies, exchanges and others. By comparison, the independently-funded FDIC employs approximately 5,000 staff to oversee about 5,100 FDIC-insured banks.

Furthermore, from FY 2005 through the end of FY 2009, the number of registered investment advisors increased by 32%, the assets those advisers managed rose by 79%, and securities trading volume jumped 137%. However, during the 2005-2007 period, flat or declining funding forced the SEC to reduce its staffing levels by 10% and to cut its investment in new technologies by 50%. Despite increased funding in the last couple of years, the SEC has a smaller workforce now than it had in 2005. And the SEC’s human capital policies have remained woefully inadequate to keep the agency competitive in terms of staffing.

After the Legislative Conference, Chapter 293 President Greg Gilman stated, “I want to thank all of the members of Chapter 293 who participated in this important conference, and also our friends at the OCC and FDIC who helped to advance Chapter 293's agenda for the SEC. Independent-funding is an important issue on which the Union and SEC Chairman Schapiro are in close agreement. NTEU appreciates the Chairman’s efforts in this regard, and we hope that SEC independent-funding will be a part of the financial regulatory reform package ultimately enacted by Congress.”

Independent funding for the SEC was included in the Senate Banking Committee’s financial regulatory reform bill, but it was not including the House Financial Services Committee’s bill. As the legislative process moves forward, NTEU will continue to advocate for this important change, and we will keep you apprised of our efforts.

In addition to many meetings on the Hill, representatives from the SEC, FDIC and OCC were also fortunate to participate in an NTEU-arranged meeting with staff from the House Financial Services Committee and members of a consumer advocacy group. These sessions included educating Congressional members and their staffers about the work that we do and their need to support us on our issues. A candid discussion ensued regarding the need to ensure that inherently governmental work (such as supervision of the country’s financial institutions) continues to be performed by government employees.

Other Highlights from the Conference

In a speech to the conference attendees, NTEU National President Colleen Kelley shared stories of the heroic actions by IRS employees in Austin, Texas, who risked their lives, amid flames, smoke and debris, to assist each other when a plane deliberately crashed into their office building on February 18. NTEU paid tribute to 27-year IRS collections manager Vernon Hunter, who died in that attack, and announced a scholarship in his name. President Kelley also shared a letter from President Barack Obama addressing the critical issue of federal employee safety which was also posted on the White House web site.

Sen. Barbara Mikulski (D-Md.) and Rep. Nita Lowey (D-N.Y.) also appeared at the conference. Sen. Mikulski expressed her concern about employee safety and vowed to stand side-by-side with federal employees on a variety of important issues, including on federal contracting. Rep. Lowey, sponsor of H.R. 1881, a bill to provide collective bargaining rights for employees of the Transportation Security Administration (TSA), reported that employees in that troubled agency need both a clear career path and respectful treatment from management. Later in the week, we heard from Jeffery Zients, deputy director of the Office of Management and Budget and co-chair, with Director John Berry of the Office of Personnel Management, of the newly formed National Council on Federal Labor-Management Relations. Director John Berry also joined us on the Hill at an NTEU sponsored reception and roamed the audience taking candid one-on-one questions from NTEU participants.

In addition to the financial regulatory agency issues, NTEU members also advocated for several other NTEU priority legislative issues for 2010, including:

• TSA bargaining rights;
• Parity in military and civilian pay increases;
• Winning the right for federal retirees to use pretax dollars to pay health care premiums; and
• Securing affordable health care including support for more transparent management of prescription drugs costs as a key step towards holding down premium increases in the Federal Employees Health Benefits Program.

To view photos from the 2010 Legislative Conference, click here!