House Ag announces CFTC reauthorization bill, markup Wednesday
April 08, 2014 | 05:30 PM
House Agriculture leaders on Monday introduced a bipartisan bill to reauthorize the Commodity Futures Trading Commission and scheduled a markup Wednesday at 9 a.m. in Room 1300 of the Longworth House Office Building.
House Agriculture Committee Chairman Frank Lucas, R-Okla., ranking member Collin Peterson, D-Minn., General Farm Commodities and Risk Management Subcommittee Chairman Michael Conaway, R-Texas, and Rep. David Scott, D-Ga., the ranking member on the subcommittee, introduced the bill they call H.R. 4413, the Customer Protection and End-User Relief Act.
"This legislation is a bipartisan effort to reauthorize and improve the operations of the Commodity Futures Trading Commission as well as address concerns relating to protecting customers from another market failure such as MF Global and Peregrine Financial,” they said in a news release.
“It is the product of a multi-year process that included hearing perspectives from market participants, end-users, futures customers, and the CFTC,” they added.
Lucas told the North American Agricultural Journalists today that the bill was written as former CFTC Chairman Gary Gensler left office and the commission was issuing rules and then “no action” letters on the same rules. The bill will not repeal the Dodd-Frank financial services reform act, but make some changes to it.
Lucas said he considers the provisions “rational steps,” but that he also expects the commission to move forward on the rule-making process while the bill moves through Congress.
The likelihood that the commission will act decisively on rules indicates, Lucas said, that they should have gotten the job done two or three years ago. But he also said that he believes Congress should write laws while the executive branch implements them rather than relying too much on the rulemaking process for establishing government policy.
Lucas said he expects there to be some amendments offered to the bill but that the bill that moves out of committee will be similar to the one that the four leaders have proposed. He said he has not discussed the bill with the Republican leadership, but that he does not believe it should take much floor time.
Lucas also said that it is “gut feeling” that the Senate will want to pass a one-line reauthorization but Senate Agriculture Committee Chairman Debbie Stabenow, D-Mich., said he was wrong about that when she spoke to the agricultural journalists. (See preceding story.)
Conaway told the agricultural journalists that he was pleased the bill would require the CFTC to use cost-benefit analysis in deciding whether to write a rule. He added that he would offer an amendment that would require that CFTC rules be "sunsetted" after five or 10 years unless they can be justified for continuation.
But Conaway said he is not certain he will call for a vote on that amendment.
Peterson said the Democrats agreed to sponsor the bill after Republicans “watered down” a “broad exemption” for financial entities to be exempt from margin and capital requirements that would have exempted more financial firms than the Democrats wanted to exempt.
The CFTC, which comes up for periodic review, needs to be reauthorized, Peterson said, because farmers use the financial markets and “We have to make sure we have a good well-functioning CFTC.”
Peterson said he believes most Democrats on the committee will support the bill, but added that he has not whipped it. There could be amendments that would “drive off” Democratic support, he said.
In their joint press release, the committee leaders each made comments on the bill.
“I’m pleased to introduce this bipartisan legislation with my friends and colleagues,” Lucas said. “It is a responsible and balanced bill that improves the efficiency and accountability of the CFTC, ensures regulations are implemented in a sensible manner, maintains the integrity of the marketplace, and guarantees our global competitiveness.”
“This bill builds upon the previous bipartisan actions of the Agriculture Committee to further clarify that those not responsible for the financial collapse, end-users who actually use the markets to hedge against risk, do not bear the brunt of new financial regulations,” Peterson said. “Yet again, the Agriculture Committee has put aside Washington's extreme partisan rhetoric in favor of bipartisan legislation. While I don't think this bill is perfect, no bill ever is, this is reasonable legislation that I hope my colleagues will support.”
Conaway noted that the full committee and the subcommittee had held a total of four hearings and said, “My bill requiring the CFTC to quantify the costs and benefits of future regulations and orders was included in the overall legislation. Quantifying the implications of new regulations will strengthen our overall economy and encourage the creation of jobs.”
“After meeting with the current nominee to lead the agency, Mr. Timothy Massad, it is clear that this bill will bring reforms and codify many institutional regulations that the industry has already begun to take,” Scott added.
▪ H.R. 4413 — Consumer Protection and End-User Relief Act ▪ — Summary
House Agriculture Committee Chairman Frank Lucas, R-Okla., ranking member Collin Peterson, D-Minn., General Farm Commodities and Risk Management Subcommittee Chairman Michael Conaway, R-Texas, and Rep. David Scott, D-Ga., the ranking member on the subcommittee, introduced the bill they call H.R. 4413, the Customer Protection and End-User Relief Act.
"This legislation is a bipartisan effort to reauthorize and improve the operations of the Commodity Futures Trading Commission as well as address concerns relating to protecting customers from another market failure such as MF Global and Peregrine Financial,” they said in a news release.
“It is the product of a multi-year process that included hearing perspectives from market participants, end-users, futures customers, and the CFTC,” they added.
Lucas told the North American Agricultural Journalists today that the bill was written as former CFTC Chairman Gary Gensler left office and the commission was issuing rules and then “no action” letters on the same rules. The bill will not repeal the Dodd-Frank financial services reform act, but make some changes to it.
Lucas said he considers the provisions “rational steps,” but that he also expects the commission to move forward on the rule-making process while the bill moves through Congress.
The likelihood that the commission will act decisively on rules indicates, Lucas said, that they should have gotten the job done two or three years ago. But he also said that he believes Congress should write laws while the executive branch implements them rather than relying too much on the rulemaking process for establishing government policy.
Lucas said he expects there to be some amendments offered to the bill but that the bill that moves out of committee will be similar to the one that the four leaders have proposed. He said he has not discussed the bill with the Republican leadership, but that he does not believe it should take much floor time.
Lucas also said that it is “gut feeling” that the Senate will want to pass a one-line reauthorization but Senate Agriculture Committee Chairman Debbie Stabenow, D-Mich., said he was wrong about that when she spoke to the agricultural journalists. (See preceding story.)
Conaway told the agricultural journalists that he was pleased the bill would require the CFTC to use cost-benefit analysis in deciding whether to write a rule. He added that he would offer an amendment that would require that CFTC rules be "sunsetted" after five or 10 years unless they can be justified for continuation.
But Conaway said he is not certain he will call for a vote on that amendment.
Peterson said the Democrats agreed to sponsor the bill after Republicans “watered down” a “broad exemption” for financial entities to be exempt from margin and capital requirements that would have exempted more financial firms than the Democrats wanted to exempt.
The CFTC, which comes up for periodic review, needs to be reauthorized, Peterson said, because farmers use the financial markets and “We have to make sure we have a good well-functioning CFTC.”
Peterson said he believes most Democrats on the committee will support the bill, but added that he has not whipped it. There could be amendments that would “drive off” Democratic support, he said.
In their joint press release, the committee leaders each made comments on the bill.
“I’m pleased to introduce this bipartisan legislation with my friends and colleagues,” Lucas said. “It is a responsible and balanced bill that improves the efficiency and accountability of the CFTC, ensures regulations are implemented in a sensible manner, maintains the integrity of the marketplace, and guarantees our global competitiveness.”
“This bill builds upon the previous bipartisan actions of the Agriculture Committee to further clarify that those not responsible for the financial collapse, end-users who actually use the markets to hedge against risk, do not bear the brunt of new financial regulations,” Peterson said. “Yet again, the Agriculture Committee has put aside Washington's extreme partisan rhetoric in favor of bipartisan legislation. While I don't think this bill is perfect, no bill ever is, this is reasonable legislation that I hope my colleagues will support.”
Conaway noted that the full committee and the subcommittee had held a total of four hearings and said, “My bill requiring the CFTC to quantify the costs and benefits of future regulations and orders was included in the overall legislation. Quantifying the implications of new regulations will strengthen our overall economy and encourage the creation of jobs.”
“After meeting with the current nominee to lead the agency, Mr. Timothy Massad, it is clear that this bill will bring reforms and codify many institutional regulations that the industry has already begun to take,” Scott added.
▪ H.R. 4413 — Consumer Protection and End-User Relief Act ▪ — Summary
