Congress introduced bills in reaction to the financial crisis, such as the Dodd-Frank Act. Additionally, there is a number of other bills that will likely never be considered outside of committee. One such bill is the Too Big to Fail, Too Big to Exist Act, H.R. 4963.
The Act, presently with the Financial Services Committee, defines "too big to fail" as any entity that has grown so large that its failure would have a catastrophic effect on the stability of either the financial system or the U.S. economy without substantial government assistance. Pursuant to the Act, within 90 days after enactment, the Secretary of the Treasury is required to provide to Congress a list of all banks, investment banks, hedge funds, and insurance companies that the Secretary believes are too big to fail. Beginning one year after enactment, the Secretary of the Treasury is required to break up the entities deemed too big to fail.
It is unlikely that the Act will ever become law. Nonetheless, the Act illustrates how a crisis can spawn interesting legislation.
Recently, there has also been Congressional activity with respect to the conflict minerals provisions contained in Section 1502 of the Dodd-Frank Act. Generally, Section 1502 requires the SEC to adopt rules requiring SEC-reporting companies to disclose their use of "conflict minerals" that originate in the Democratic Republic of the Congo (DRC) or an adjoining country. If the reporting company uses any conflict minerals originating in the DRC or an adjoining country, the company is required to submit a report to the SEC of the due diligence conducted on the source and chain of custody of such minerals to ensure that the company's products do not contain conflict minerals that directly or indirectly finance or benefit armed groups in the DRC or an adjoining country.
On May 10, 2012, a House Financial Services Panel led by Congressman Gary G. Miller held a hearing to examine the consequences of Section 1502. During the hearing, a variety of views were expressed, ranging from concern about the impact Section 1502 may have on jobs in the United States to support for the provision as necessary to address the continuing violence in the DRC. Subsequent to the hearing, Congressman Miller's May 11, 2012 Weekly Washington Update stated that "[w]hile Section 1502 is well-intended, it was added to Dodd-Frank during latenight conference negotiations, without the benefit of any prior congressional hearings or the potential impact on American jobs and global competitiveness."
Section 1502 required that the SEC issue rules implementing Section 1502 no later than April 15, 2011, a date that has long since passed. The SEC did issue its proposed rules on December 15, 2010. Thereafter, the SEC held a roundtable discussion on the proposed rules on October 18, 2011. However, the SEC has yet to publish a final rule.
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