The Securities and Exchange Commission and other federal agencies are between Scylla and Charybdis—the original rock and a hard place of Greek mythology—when it comes to performing required cost-benefit analyses for the Dodd-Frank Act rules they are in charge of writing.
Conduct too little analysis and the agencies leave themselves open to second-guessing by industry associations and corporate lobby groups, which can then challenge the rules on the basis of inadequate cost reviews and get them stricken from the books. That’s exactly what happened to the proxy access rule that ended up getting tossed aside after the U.S. Chamber of Commerce and others launched a legal challenge. (More on that and other challenges to rulemaking in a moment.)
