January 26, 2018
The Honorable Rodney Frelinghuysen
Chairman, House Committee on Appropriations
The Honorable Tom Graves
Chairman, House Subcommittee on Financial Services and General Government
The Honorable Thad Cochran
Chairman, Senate Committee on Appropriations
The Honorable Shelley Moore Capito
Chairman, Senate Subcommittee on Financial Services and General Government
On behalf of the undersigned organizations, we write to urge opposition to any effort to include in a spending bill language that overrides SEC rulemaking aimed at allowing for paperless delivery of mutual fund reports.
Current SEC rules require mutual funds to send paper versions of semi-annual shareholder reports. This process is enormously wasteful and environmentally destructive. An estimated 1.87 million trees are required to provide the 440 million shareholder reports sent each year to approximately 94 million individual shareholders, who ultimately bear the cost of this enormous undertaking. This system simply no longer makes sense at a time when Americans are increasingly logging on to shop, socialize, bank, or use any of the multitudes of other services available over the internet.
Proposed SEC Rule 30e-3 would allow funds to send reports electronically, while also preserving the option to receive paper reports for those who want them. This commonsense effort has met heavy opposition from the paper industry, which stands to lose the billions that mutual fund shareholders would save by allowing paperless reports.
At this powerful lobby’s behest, there have been efforts to prevent the SEC from implementing rule 30e-3. We oppose the inclusion of language to this effect in a final FY 2018 appropriations package. First, this type of legislation is best pursued through regular order, not as a rider to “must-pass” appropriations. Second, cronyism is not a sufficient reason for Congress to override efforts at pro-consumer revisions to outdated regulations.
Modernizing disclosure of mutual fund reports would be both more convenient and cheaper for shareholders, while also benefiting the environment. And those likely few shareholders who wished to continue receiving paper reports would be able to do so. There is no rationale, other than special interest protectionism, for preventing the SEC from updating its disclosure rules. It’s time to let mutual funds participate in the 21st century.
Andrew F. Quinlan ~ President, Center for Freedom and Prosperity
Pete Sepp ~ President, National Taxpayers Union
John Berlau ~ Senior Fellow, Competitive Enterprise Institute
Norman Singleton ~ President, Campaign for Liberty
David Williams ~ President, Taxpayers Protection Alliance
Eli Lehrer ~ President, R Street Institute
Tom Schatz ~ President, Council for Citizens Against Government Waste
Andrew Langer ~ President, Institute for Liberty
Charles Sauer ~ President, Market Institute
Seton Motley ~ President, Less Government
Dan Perrin ~ Executive Director, HSA Coalition
Jeffrey Mazzella ~ President, Center for Individual Freedom
Jason Pye ~ Vice President of Legislative Affairs, FreedomWorks
Heather R. Higgins ~ President and CEO, Independent Women’s Voice
Karen Kerrigan ~ President & CEO, Small Business & Entrepreneurship Council
George Landrith ~ President, Frontiers of Freedom
Chuck Muth ~ President, Citizen Outreach
Steve Pociask ~ President, American Consumer Institute
Andrew Roth ~ Vice President of Government Affairs, Club for Growth
Judson Phillips ~ Founder, Tea Party Nation
James L. Martin ~ Founder/Chairman, 60 Plus Association
Lisa B. Nelson ~ Chief Executive Officer, ALEC Action
Jonathan Bydlak ~ President, Coalition to Reduce Spending
David W. Almasi ~ Vice President, National Center for Public Policy Research
Mario H. Lopez ~ President, Hispanic Leadership Fund
Matthew Kandrach ~ President, Consumer Action for a Strong Economy