WASHINGTON, Sept. 15, 2016 - Nominees to the Commodity Futures Trading Commission assured the Senate Agriculture Committee that they will regularly seek input from farmers and keep in mind the impact of regulations on the agribusiness sector.
However, the Democratic nominee, Christopher Brummer, also stressed that it was also important for the agency to consider the risk to the overall economy of failing to police the futures market adequately.
“It’s absolutely critical that the CFTC both remembers its roots and the importance of agricultural producers to the U.S. economy,” said Brummer, a Georgetown University law professor. But he questioned that threats to the integrity of futures markets “must be addressed swiftly.”
The Republican nominee, former House GOP adviser Brian Quintenz, said the commission had to thoroughly analyze the costs of new regulations to ensure that they “correspond to the risks hat are being mitigated.” Quintenz is managing principal and chief investment officer of his own firm, Saeculum Capital Management.
Both men promised senators that they would get out of Washington and meet with producers regularly.
Quintenz cited his experience as an aide on Capitol Hill, which included six years as a policy adviser to former Congresswoman Deborah Pryce of Ohio. Referring to the state's farmers, he said: “I don’t think you get a better sense of their businesses and their pressure and their costs than you do by actually going there and being on the ground with them."
Bummer said, “I, too, can commit to getting out and talking to farmers and ranchers and other end-users about their needs.”Neither nominee has an agricultural background but both sought to emphasize their past experience with farmers, including Quintenz’ interactions with Ohio constituents. Brummer recalled helping his grandfather take produce to market from his farm in Virginia.
There are currently two vacancies on the five-member commission.
CFTC Chairman Timothy Massad has taken steps to soothe concerns in the agribusiness sector about a number of regulations that the CFTC is considering or has finalized under the Dodd-Frank law.
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Shortly before Thursday’s hearing, in fact, he announced that the agency would move to delay for one year a reduction in the minimum value at which entities must register as swap dealers. The threshold was set to fall from $8 billion to $3 billion in January.
Massad acknowledged that small banks were worried that they would have to register under the lower limit, and he said the commission needed to address several issues, including the effect on competition.
Quintenz supported the delay. “I fear that if we get that wrong we end up driving providers of those swaps out of the market and of consolidating risk.”
Brummer didn’t oppose the delay, but he said he was concerned about some potentially risky transactions and those he described as “flying under the radar.”
Senate Agriculture Chairman Pat Roberts, R-Kan., closed the hearing by warning the nominees not to expect an increase in the CFTC budget, something that has long been a priority for the committee’s ranking Democrat, Debbie Stabenow of Michigan, as well as the Obama administration.
“Now’s not the time. It’s not going to happen,” Roberts said, citing the slump in the farm economy.
Roberts later told reporters he needed to survey senators before scheduling a vote on the nominations.