House Republicans request intervention before Dodd-Frank rules deadline
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WASHINGTON, October 5, 2012- House Republican chairmen, including House Agriculture Committee Chairman Frank Lucas, R-Okla., asked Treasury Secretary Tim Geithner to intervene and clarify Dodd-Frank Act regulations before they go into effect next week.
Lucas, along with Chairmen Spencer Bachus, R-Ala., Mike Conaway, R-Texas, and Scott Garrett, R-N.J., sent the letter to Geithner today regarding the Commodity Futures Trading Commission's (CFTC) impending deadline to implement new rules on Friday, Oct. 12. Many of the rules the CFTC established for the swaps markets will go into effect on that date.
The Congressmen wrote to Geithner, who is Chairman of the Financial Stability Oversight Council, that “widespread confusion and uncertainty exists among market participants regarding the implementation of these new rules, especially with respect to exactly how the Commodity Futures Trading Commission plans to impose and enforce these new rules.”
Some end users are concerned because the CFTC did not yet respond to their petitions to exempt them from compliance with these rules, they noted. Some asked for a letter from the CFTC promising not to launch an enforcement action against them in the event that their new systems are not ready before next Friday. The Congressmen asked Geithner to intervene before Oct. 12 and “provide clarity and certainty for U.S. market participants.”
Among their several concerns, they noted a lack of coordination between the CFTC and its foreign counterparts and a duplicative requirement for commodity pool operators, which they said the Securities Exchange Commission already regulates.
“Rules implemented to meet arbitrary or rushed deadlines will result in needless economic harm and market confusion,” the letter stated, pointing to the possibility of utility costs rising due to “new regulations that will cause much of the market to abandon dealing with public utilities.”
The letter emphasized that several utilities filed a petition for relief, along with other sectors requesting no-action or exemptive relief. If CFTC ignores these requests, the letter warned, “these new rules will harm America's economic engine by impairing many of the companies that provide vital financing to consumers and American businesses.”
To view the entire letter, click here.
CFTC Commissioner Bart Chilton responded Friday afternoon, insisting that CFTC “pause and take a breath.”
“Right now, we've got a couple hundred requests for clarification and/or regulatory relief in some fashion on approximately three dozen discrete issues,” he said. “Every single request deserves a response.”
Before the December 31 completion of Dodd-Frank rules, Chilton suggested that CFTC require compliance from entities that requested guidance or relief and had their questions addressed, “which could happen in the next few days.”
He further suggested that “it would not be appropriate, reasonable, or responsible” for CFTC to require compliance with Dodd-Frank rules from those requesting guidance or exemption until they receive a response.
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