Senator John Kennedy (R-La.), a member of the Senate Banking Committee, has introduced the Municipal Securities Rulemaking Board (MSRB) Reform Act. The proposed legislation aims to strengthen standards and oversight at the MSRB, which regulates the municipal bond market used to finance public projects such as airports and roads.
Kennedy criticized the current structure of the MSRB, stating, “The MSRB oversees a municipal securities market that is worth trillions of dollars in public projects. It’s supposed to represent the consumer. Instead, it’s an insider’s club. It’s more incestuous than King Tut’s family. Public seats on the board shouldn’t be filled by executives who just quit their Wall Street jobs. These reforms are long overdue.”
The fifteen-member MSRB board includes eight members from the public sector and seven from the private sector. Currently, there is limited oversight from both Congress and the Securities and Exchange Commission (SEC). The board sets its own budget and determines compensation for its members independently, leading to what Kennedy described as abuses such as paying its President and CEO over $700,000 in 2024.
Although both the MSRB and SEC have taken some internal steps toward reform, Congress has not enacted permanent changes. Kennedy’s bill would codify these internal reforms while introducing additional measures:
– Board members representing the public sector must be at least five years removed from any association with a private municipal securities entity.
– The SEC would be required to approve all committee members of the MSRB and set limits on board compensation.
– The number of board members would be permanently fixed at 15, with regulated parties holding a majority.
The American Securities Association (ASA) expressed support for Kennedy’s proposal. ASA President and CEO Chris Iacovella said: “ASA applauds Sen. Kennedy’s MSRB Reform Act because it brings much-needed transparency and accountability to the MSRB’s governance process. Reforming the MSRB’s board will benefit investors by freeing our public finance markets from conflicted individuals pushing political anti-market agendas.”
According to Senator Kennedy’s official website, he represents Louisiana statewide interests through work on several Senate committees including Appropriations, Budget, Energy and Natural Resources, as well as Banking, Housing and Urban Affairs.
Kennedy also engages constituents through newsletters, town halls, public events across Louisiana communities such as Alexandria, Baton Rouge, Lake Charles, Monroe, New Orleans and Shreveport (source). He has advanced policies supporting veterans, farmers, small businesses and national security (source).
