House Passes Bill to Create Two New Federal Ombuds Programs

Friday, the US House of Representatives passed the Wall Street Reform and Consumer Protection Act of 2009 by a vote of 223 to 202. HR 4173 is intended to provide for financial regulatory reform, to protect consumers and investors, to enhance Federal understanding of insurance issues, and to regulate the over-the-counter derivatives markets. Included in the reforms are new Ombuds programs for the Securities and Exchange Commission and the Public Company Accounting Oversight Board. The SEC Ombuds would act as a liaison between the SEC and anyone by SEC regulatory activities, advising the SEC and individuals regarding compliance with Federal securities laws, and maintain confidentiality of communications with individuals. The PCAOB Ombuds act in a similar role for the PCAOB and registered public accounting firm with respect to PCAOB the regulatory activities, including the duty to preserve confidentiality. (GovTrack; OpenCongress; LA Times.)

These two proposed Ombuds programs would be similar to the robust Office of the Ombudsman for the Financial Industry Regulatory Authority (formerly the National Association of Securities Dealers). The financial services industry has been calling for this type of external Ombuds program for years. The Senate is expected to move forward on their version of the financial services reform fill next year.

Related posts: NASDAQ and Banking Lobby Endorse Ombuds for Accounting Oversight; SEC Affirms Role of NASD Ombuds; Banking Expert Recommends Ombuds for Accounting and Securities Industries.