The US House of Representatives recently faced a crucial decision regarding President Joe Biden’s veto of the resolution to end SEC Staff Accounting Bulletin (SAB) 121. Despite the majority support for overturning SAB 121 with 228 votes in favor, the House fell short of the two-thirds vote threshold required to override a presidential veto.
According to Fox Business reporter Eleanor Terrett, several Democrats switched their positions since the previous vote in May. Notably, Dean Phillips (D-MN), Mikie Sherrill (D-NJ), and Marc Veasey (D-TX) changed their votes to oppose the end of SAB 121, while Jonathan Jackson (D-IL), Ro Khanna (D-CA), Tom Suozzi (D-NY), and Shri Thanedar (D-MI) shifted their stance in favor of rescinding SAB 121. Republican Drew Ferguson (R-GA) also changed his vote from no to yes.
The resolution previously passed the House in May but faced a setback in the recent vote. Representative Mike Flood, the original sponsor of the resolution, expressed disappointment in the failed outcome. He vowed to explore alternative approaches to end SAB 121 and promote innovation in the digital financial sector.
Mike Flood criticized SAB 121 as a restrictive regulation that hinders banks’ involvement in digital asset custody. He accused the SEC of overstepping its authority and impeding the growth of digital financial services. House Financial Services Committee Chairman Patrick McHenry condemned President Biden’s veto, accusing the administration of prioritizing bureaucratic power over the interests of the American people.
The Blockchain Association and the American Banking Association have both voiced their opposition to SAB 121. The Blockchain Association aims to challenge the SEC rule through congressional and legal means, while the American Banking Association highlights the limitations imposed by SAB 121 on banks offering digital asset custody services. The industry associations support the repeal of SAB 121 to enable greater adoption of digital assets and financial innovation.
The debate over SAB 121 reflects the broader tensions between regulatory oversight and technological advancement in the financial industry. The outcome of the House vote underscores the challenges in navigating complex regulatory frameworks and balancing the interests of various stakeholders. The future trajectory of SAB 121 and its impact on the digital financial landscape remain uncertain, signaling the ongoing struggle for regulatory clarity and innovation in the evolving financial ecosystem.
