House GOP forces through CFTC overhaul
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WASHINGTON, June 9, 2015 - Over stiff Democratic opposition, the House approved a reauthorization of the Commodity Futures Trading Commission that would knock down some Dodd-Frank regulations.
The bill, which passed 246-171, faces the threat of a presidential veto and an uncertain future in the Senate. Nine Democrats voted for the bill; one Republican voted against it.
Among other things, the measure (HR 2289) would require CFTC to analyze the costs and benefits of all new rules and exempt grain elevators and other agricultural interests that are managing their own money from having to maintain records of all forms of communications that lead to a trade.
“It is now more difficult and more expensive for farmers, ranchers, processors, manufacturers and merchandisers to manage their risks than it was five years ago,” said House Agriculture Chairman Mike Conaway, R-Texas, calling the bill's regulatory changes “narrowly targeted.”
In a statement of administration policy, the White House said the bill threatens “the financial security of the middle class by encouraging the same kind of risky, irresponsible behavior that led to the Great Recession,” a concern echoed by House Agriculture's top Democrat, Collin Peterson of Minnesota.
“This is all cost and no benefit, unless you're one of the nine big banks who, as far as I'm concerned, have not learned a thing from the financial crisis,” Peterson said. “This not only adds an unneeded layer of government bureaucracy, it opens the door to lawsuits from the major banks seeking to delay or completely derail CFTC rulemakings.”
A similar bill passed the House last year but went nowhere in the Senate. Senate control has since switched to the GOP, but Senate Agriculture Chairman Pat Roberts, R-Kan., has not announced what his panel will do.
The House bill also seeks to force an end to a dispute with the European Union over its approval of U.S. exchanges. The EU is insisting that the United States accept its regulations. Peterson said the bill's provisions would undermine the negotiations.
Other provisions would limit capital requirements for non-bank swaps dealers; require the commission to provide a comprehensive plan addressing cross-border regulatory requirements; create a judicial review process similar to the one the Securities and Exchange Commission has; and require the CFTC to follow a notice-and-comment process before issuing policy statements, guidance documents and interpretive rules that have the force of law.