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Mr. OWENS. Mr. Speaker, I yield myself such time as I may consume. I rise in support of H.R. 2682.
I would like to thank Chairman Lucas and Ranking Member Peterson for their leadership on this important issue, as well as Mr. Scott from the Agriculture Committee, and our colleagues on Financial Services, Mr. Peters, Mr. Green and, of course, Mr. Grimm.
As a cosponsor of H.R. 2682 and as one of the authors of this legislation, I believe that the definition of an ``end user'' needs to be very specific to ensure that the CFTC implements the intent of Congress in exempting true end users from certain derivatives regulations.
My district in upstate New York includes a number of entities that would be inappropriately captured as swap dealers under the proposed CFTC rules, including agricultural cooperatives, farm credit institutions, community banks, and electric cooperatives. Clearly, none of these entities were intended by Congress to be covered by these regulations.
While each of them uses derivatives to meet their business needs, they are not engaging in derivatives transactions as their primary businesses. If forced to comply with the increased margin and clearing requirements, it could make the services currently offered by end users cost prohibitive and impede their ability to conduct business, likely resulting in higher prices for my constituents and diverting capital that could otherwise be invested and used to help create jobs. These are all negative consequences that our economy can ill afford at this time.
These financial instruments are particularly important for dairy farmers in my district who depend on their cooperatives to offer them tools to manage price risks and to lock in margins. A local cooperative must have the ability to enter into swaps with its members and have affordable access to the market with other commercial counterparties to offset the risk of providing these swaps and forward contracts. Under the CFTC's proposed rules, the cooperatives would be regulated as a swap dealer even though they are using derivative contracts to hedge commercial risk and to support the viability of their members.
There is no doubt in my mind that the derivatives market needs to be regulated and that certain participants need to post margin to cover their trades in order to mitigate systemic risk throughout the financial system. However, this legislation will codify Congress' intent and ensure that commercial end users can continue to hedge against risk.
I urge my colleagues on both sides of the aisle to support this important bipartisan legislation, and I yield back the balance of my time.
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