The recent vote in the US House of Representatives regarding the rescindment of SEC Staff Accounting Bulletin (SAB) 121 failed to garner enough support to overrule President Joe Biden’s earlier veto. While there were 228 House members who voted in favor of HJ Res. 109 to end SAB 121, this number fell short of the two-thirds vote threshold needed to counter a presidential veto. With 184 members voting against the resolution and 21 abstaining, it is evident that the outcome lacked the necessary majority to overturn SAB 121.
It is noteworthy to highlight the significant shift in political stances by several Democrats since a previous vote in May. Members such as Dean Phillips (D-MN), Mikie Sherrill (D-NJ), and Marc Veasey (D-TX) changed their votes to oppose the end of SAB 121. Conversely, Jonathan Jackson (D-IL), Ro Khanna (D-CA), Tom Suozzi (D-NY), and Shri Thanedar (D-MI) altered their votes in support of rescinding SAB 121. Additionally, Republican Drew Ferguson (R-GA) also changed his vote from no to yes. This changing landscape of political positions among lawmakers reflects the complexity of the issue at hand and the diverse perspectives involved.
Representative Mike Flood, the original sponsor of the resolution, expressed disappointment at the failed vote and vowed to continue seeking alternative pathways to address the concerns surrounding SAB 121. Flood criticized the regulation as a hindrance to the growth of the digital financial sector and denounced the SEC’s overreach in defining bank custody policies. House Financial Services Committee Chairman Patrick McHenry condemned President Biden’s veto, accusing the administration of prioritizing bureaucratic interests over those of the American people. The Blockchain Association and the American Banking Association also voiced their opposition to SAB 121, citing its negative impact on bank operations and digital asset custody.
The inability to overturn SAB 121 highlights the challenges in navigating regulatory frameworks in the evolving landscape of digital finance. The conflicting viewpoints and interests among lawmakers, industry stakeholders, and regulatory bodies underscore the need for comprehensive and informed decision-making processes. Moving forward, it will be crucial to foster dialogue, collaboration, and consensus-building to address the complexities of digital asset regulation and promote innovation in the financial sector.
