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The American Bankers Association has asked securities regulators to continue exempting smaller public companies from stricter accounting requirements adopted by Congress in 2002, deferring application for another two to three years.

In a letter Monday to Securities and Exchange Commission Chairman Christopher Cox, the banking trade group said it “strongly urges” smaller companies remain exempt from requirements to assess internal financial-reporting controls, have them reviewed by their outside auditor, and report major flaws to investors and regulators.

Senate Small Business Committee Chairman John Kerry, D-Mass.; House Small Business Committee Chairwoman Nydia Velasquez, D-N.Y.; and the senior Republicans on those panels, Sen. Olympia Snowe, R-Maine, and Rep. Steve Chabot, R-Ohio, are in strong support of such a delay, as is the Small Business Administration, according to the ABA.

Dow Jones Newswires: Bankers Assn Seeks Continued Small-Business Exemption

Sen. John Kerry (D-Mass.) has introduced legislation to ease the concerns small companies have about the cost of complying with section 404 of the Sarbanes-Oxley Act. But amid Congress’s month-long break until the Nov. 7 elections, followed by a year-end, lame-duck session, the bill isn’t expected to go anywhere or get much attention.

None of the sources CFO.com contacted — many of them small business executives — had heard of the legislation, which the former presidential candidate introduced in the Senate nearly two weeks ago. It was referred to the Committee on Small Business and Entrepreneurship.

Called the Small Business Sarbanes-Oxley Assistance Act of 2006 (S. 3919), the legislation would help companies comply with Sarbox in two ways: the Small Business Administration would award $5 million annually in federal grants to small businesses, and a task force would periodically report to Congress how to help companies comply with the 2002 law. The task force, assembled by the SBA’s chief counsel for advocacy, would include Securities and Exchange representatives.

CFO.com: Kerry’s Sarbox Relief Bill Not Enough