The House Agriculture Committee held a public hearing on Thursday to review seven legislative proposals to amend Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The proposals are the culmination of the committee's oversight efforts of the Commodity Futures Trading Commission (CFTC) as it writes rules for Dodd-Frank. Throughout the year, the committee has held several hearings on Title VII that have included testimony from every type of market participant. Businesses across America in a variety of industries have shared consistent concerns the CFTC is overreaching in its rulemaking and it will have a negative impact on businesses and on the economy.
"These proposals will fix some important areas in implementation where the regulators-- the CFTC in particular-- simply haven't gotten it right. We are facing widespread and potentially severe unintended consequences from these regulations that will have a direct effect on our economic recovery. When the rules are final, they’re final. Businesses across the country, including our farmers and ranchers, need to prepare for the new regulations and related costs now. They will not be able to wait for Congress to act," says Committee Chairman Frank Lucas (R-Okla.).
The proposals include the following:
H.R. 1840 would require the CFTC to assess the costs and benefits of its actions. H.R. 2682, the Business Risk Mitigation and Stabilization Act, ensures that end users can continue to use derivatives to manage business risks without being subject to costly margin requirements. H.R. 2779 provides clarification that inter-affiliate transactions, when the parties to the transaction are under common control, are not to be regulated as swaps. H.R. 2586, the Swap Execution Facility (SEF) Clarification Act, prohibits the regulators from requiring a minimum number of participants to receive or respond to quote requests. It also prohibits regulators from limiting the means of interstate commerce that market participants can use to execute swaps and prohibits the agencies from requiring a SEF to display or delay quotes for any specific period of time.
Additionally, the committee examined three draft proposals of legislation that would clarify the definition of swap dealer, would ensure pension plans are not limited in their ability to manage risk with swaps, and would allow banks to offer swaps in connection with an extension of credit without being classified as swaps dealers.
Written testimony provided by the witnesses is linked below. Witness List:
Mr. Scott Cordes, President, Country Hedging, for the National Council of Farmer Cooperatives
Mr. Douglass Williams, President and Chief Executive Officer, Atlantic Capital Bank
Ms. Bella Sanevich, General Counsel, NISA Investment Advisors, for the American Benefits Council
Mr. Chris Giancarlo, Executive Vice President, GFI Group, for the Wholesale Markets Brokers Association Americas
Ms. Brenda Boultwood, Chief Risk Officer and Senior Vice President, Constellation Energy and the Coalition for Derivatives End-Users
Mr. Todd Thul, Risk Management Leader, Cargill AgHorizons for the Commodity Markets Council