Ag Chairs Lincoln & Peterson welcome new constraints on derivatives

Ag Chairs Lincoln & Peterson welcome new constraints on derivatives

By Jon H. Harsch

© Copyright Agri-Pulse Communications, Inc.

Washington, June 25 - It took an all-nighter and the chairman's iron discipline. But the House-Senate conference completed work on financial reform legislation early Friday morning. The compromise deal includes tough new derivatives regulations which Republicans repeatedly warned in the overnight debate will devastate the financial industry.

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Senate Agriculture Committee Chair Blanche Lincoln (D-AR) hailed the conference agreement which for the most part includes her derivatives provisions - despite weeks of effort on behalf of financial institutions, the Senate Banking Committee, and the Obama administration to soften her tough new rules. In the final hours of debate early Friday morning, House Agriculture Committee Ranking Member Frank Lucas (R-OK) urged conferees to replace Lincoln's Section 716 provisions with the far less stringent provisions passed by the House last year. But House Financial Services Committee Chair Barney Frank (D-MA), the conference's no-nonsense chair, successfully made the case that the House-passed package was only more lenient because when the House acted, the full extent of problems with derivatives was still not known.

Lincoln commented on the final conference agreement that “This historic legislation will rein in the reckless Wall Street behavior that nearly destroyed our economy, hurting Arkansas small businesses and costing millions of Americans their jobs. These strong reforms will help families save for college, protect retirees, ensure small businesses can get loans and create new jobs on Main Street.” She added that “As Chairman of the Senate Agriculture Committee, I was proud to help craft the bill's strong derivatives title. This legislation brings a $600 trillion unregulated derivatives market into the light of day, ending the days of Wall Street's backroom deals and putting this money back on Main Street where it belongs. These reforms will get banks back to the business of banking, protect innocent depositors and ensure taxpayers will never again have to foot the bill for risky Wall Street gambling. I'd like to commend the conferees for coming together to finalize an agreement that brings real reform to our nation's financial markets, giving the American people the accountability and transparency they deserve,” Lincoln said.

House Agriculture Committee Chair Collin Peterson (D-MN) was equally pleased with the conference's work on H.R. 4173, Wall Street Reform & Consumer Protection Act.

While everyone had to make some compromises to come to a consensus, I think that the final outcome of this conference committee will ensure that Wall Street can no longer put America's economy at risk with irresponsible, unreasonably risky activities that caused the last crisis” Peterson said. “This legislation reflects nearly three years of public debate and a lot of bipartisan work on derivatives and their effect on the economy. The passage of this conference report demonstrates that Congress is serious about finally providing much needed oversight and transparency in the markets for over-the-counter derivatives and ensuring that they will never again threaten the stability of our financial system.”

The conference committee resolved differences between the financial reform bills that were passed by the House and Senate. The House and Senate must now vote to approve the conference report before it is sent to President Obama for signature.

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