Economic Consultant to Help With Transition at Three Regulatory Agencies

President-elect Donald Trump has named an economic consultant who has shown a hands-off approach to regulation to help his administration with the transition at three financial regulatory agencies.

Sharon Brown-Hruska, who briefly headed the Commodity Futures Trading Commission (CFTC) under President George W. Bush, was named to Trump’s landing team Tuesday for the CFTC — as well as the Securities and Exchange Commission (SEC) and Farm Credit Administration.

Brown-Hruska previously opposed some efforts at increased regulation, including the SEC’s increased oversight of the hedge-fund industry, and had often expressed the view that too much regulation of the over-the-counter derivatives market may reduce efficiencies and add costs.

She was a CFTC member from 2002 to 2006 and was the acting chairwoman for about a year, to mid-2005.

Her role as part of the landing team will be to ensure a smooth transition, particularly at the SEC, where Chairwoman Mary Jo White has said she will depart when the Obama administration ends in January.

Trump has provided little detail about his ambitions for financial regulation, but the Republicans who control both chambers of Congress have been outspoken in their desire to roll back regulation, especially the Dodd-Frank financial overhaul of 2010.

At the CFTC, in 2004, Brown-Hruska disagreed with the SEC’s approval of new registration requirements for hedge-fund advisers. She argued that the CFTC and the National Futures Association, a self-regulatory body, had already accomplished the SEC’s oversight goals. The SEC decision at the time was a 3-2 vote, and also drew the opposition of then-Federal Reserve Chairman Alan Greenspan.

Her CFTC tenure was otherwise marked by agreements between the two agencies over the regulation of the trading of futures on debt security index contracts. They also signed an agreement on how they would oversee security futures.

Brown-Hruska, in a speech in 2014, criticized the CFTC for reducing the role of economists in evaluating the cost of regulation on U.S. businesses by downgrading the role of chief economist to what she called a consultant.

Various rules arising from the Dodd-Frank law have been tossed out in court over inadequate economic evaluations, and agencies are now working to improve the cost-benefit data on rule making.

Brown-Hruska joins the transition team as the CFTC is considering new rules for what’s known as position limits, which cap the amount of exposure a party may have to various derivatives. It’s unclear whether those rules will be rolled out before Trump takes office.

In a speech from 2009 on the matter, she said she opposed any effort to set limits on financial derivatives, but was silent on the subject of the current CFTC proposal, which sets derivative limits designed to curb speculation in 28 physical commodities like gold and oil.

Brown-Hruska had previously urged regulators to refrain from overreacting to high energy prices in the mid-2000s. At the time, she maintained the energy markets had a high degree of transparency, and that additional regulation threatened to add costs.

Brown-Hruska is now a director of the Securities and Finance Practice and the White Collar, Investigations and Enforcement Practice at NERA Economic Consulting.

Federal records show no donations by her to Trump’s campaign. She donated $250 to Hillary Clinton’s campaign last month, and also contributed $1,000 to former Jeb Bush’s primary campaign. She previously donated to the presidential campaigns of Mitt Romney and John McCain, records show.