Investing.com -- One day after facing a hard line of questioning from Sen. Elizabeth Warren (D., Mass.) on enforcement of the Dodd-Frank law, Janet Yellen reiterated on Wednesday that the Federal Reserve is not seeking to alter the 2010 act.
Introduced by President Barack Obama's administration in June, 2009, the Dodd-Frank Wall Street Reform and Consumer Protection Act, brought the most significant changes to financial regulations nationwide since reforms enacted after the Great Depression.
Asked by Rep. Jeb Hensarling (R., Texas), chairman of the House Financial Services Committee, on whether the central bank will urge Congress to make changes to the law, Ms. Yellen expounded on her comments from Tuesday's Senate hearing.
"We are not asking Congress to alter it. The act provides considerable flexibility for the Federal Reserve and other regulators to tailor rules that are appropriate to institutions that we supervise," Yellen said. "It's been a very useful piece of legislation, it has provided a roadmap for us to take strong action to improve the safety and soundness of the financial system. We have found ways to use the flexibility that the act affords us."
During his time on the floor, Hensarling also made reference to Warren's critique of Fed general counsel Scott Alvarez on Tuesday. In late-2014, Alvarez reportedly suggested that legislators should reconsider the terms of a provision of Dodd-Frank known as the "swaps push-out." Warren, in her comments, suggested that Alvarez overstepped his ground with the proposition. Following her testimony on Tuesday, Yellen came to Alvarez's defense.
Later, in response to a question from Rep. Bill Huizenga (R, Michigan), Yellen indicated that the Fed has offered policy advice to Congress in regards to Dodd-Frank in situations where it felt the legislation hampered its ability to appropriately supervise an entity.
"A case in point would be the application of the Collins Amendment to our ability to design appropriate rules for insurance companies," Yellen said.
In September, President Obama signed the changes of the Collins Amendment into law. Under the guidelines set forth in the law, the Fed is not required to apply leverage requirements of Section 171 of Dodd-Frank to insurance companies regulated by state insurance agencies.