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Washington, D.C – Two of the federal agencies responsible for protecting investors need additional funding and budget flexibility in order to keep up with the fast-changing financial services industry, according to testimony from National Treasury Employees Union National President Tony Reardon.

“Congress should not be penny wise and pound foolish when it comes to protecting the investments of American consumers, only to see the victimized lose retirement investments or life time savings,” Reardon said in written testimony to the Senate Appropriations Subcommittee on Financial Services.

The subcommittee conducted a hearing today on the 2018 appropriations for the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).

The SEC needs $1.78 billion in fiscal year 2018, which is enough to hire an additional 250 full-time employees, Reardon wrote. The amount is slightly above what was requested by the administration.

As a reminder, the SEC is not funded by tax revenue, but by fees paid by the industry adjusted to avoid any negative impact on the federal budget deficit.

For the CFTC, Reardon endorsed the Acting Chairman’s request for $285.1 million, but also asked for increased spending flexibility within the agency’s budget.

These two agencies are among the network of the government’s cops on the financial beat, responsible for preventing fraud and protecting Americans who need fair markets in order to grow their retirement nest eggs.

“The employees of the CFTC and the SEC are among the most professional, hard-working and dedicated of any in the public or private sector,” Reardon wrote. “The rapidly changing practices in the financial markets as well as new forms of fraud and wrongdoing mean that these two agencies must continue to recruit and retain employees with the highest level of skills.”

Also for the CFTC, Reardon asked Congress to add flexibility within a mandate that $50 million of the agency’s budget go toward information technology; provide pay parity with the SEC; increase telework opportunities; rely less on outsourcing to contractors; trim the layers of management; and provide additional flexible work schedules.

Reardon also testified against the administration’s proposal to eliminate the SEC’s reserve fund in 2019. Redirecting that money to the general fund of the U.S. Treasury violates the principle that fees paid to the SEC should be used for SEC purposes.

NTEU remains opposed to any reorganization plan that would close SEC field offices, and instead supports the addition of 131 additional employees in the SEC Division of Enforcement.

“Without proper SEC staff in numbers, quality, training and mobility, we will see an increasing number of seniors at risk of being cheated out of their retirement savings and investments,” Reardon wrote. “Seniors should not lose their retirement savings to unscrupulous advisors because of an understaffed or weak SEC.” 

NTEU represents 150,000 employees at 31 federal agencies and departments.