Commodity End-User Relief Act
Floor Speech
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Mr. Chairman, I yield myself such time as I may consume.
Mr. Chairman, I oppose this legislation because it will roll back important financial regulations and interfere with the CFTC's ability to do its work. I am very concerned that H.R. 2289 will open the door to the types of things that created the financial mess that we are just beginning to get ourselves out of.
So let me be clear. I don't have an issue with many of the provisions that are relevant to end-user protections. In fact, the Dodd-Frank bill that I helped write states very clearly that end users were not the problem, and the CFTC has been very receptive to that fact and taken that into consideration as they have adopted rules.
One of my biggest concerns in this bill is the new cost-benefit analysis. This is, in my opinion, all cost and not a lot of benefit unless you are one of the nine big banks who, as far as I am concerned, have not learned a thing from the financial crisis. This not only adds an unneeded layer of government bureaucracy; it opens the doors to lawsuits from major banks seeking to delay or completely derail CFTC rulemakings.
I also have serious concerns with the trouble that will be caused by section 314, the cross-border section of this bill.
Chairman Massad has been negotiating extensively and in good faith with our European counterparts to harmonize their rules with ours. I have talked to the Chairman a number of times about this, and he has assured me and it has been independently verified that they are 85 percent of the way to getting a deal in this area. This provision in my opinion will cut the negotiators off at the knees. I am worried that this provision will take us back to where we were and what was happening prior to the financial crash. The big banks at that time that have offices both in London and New York were playing us against each other, getting the United States to water down rules by threatening to move their business elsewhere and vice versa, and that was verified on committee trips that we took over to Europe and in discussions with their regulators.
The cost-benefit requirement, as I said, along with the cross-border rule, will cost $45 billion over 5 years, according to the CBO. And again, this is a cost that I believe doesn't have a whole lot of benefit.
H.R. 2289 has a whole host of other problems. The bill unravels the transparency provided by Dodd-Frank, slows down CFTC staff ability to respond to industry concerns, mucks up the Commission's ability to issue guidance if rules need updating or clarification, and relitigates a disagreement between former commissioners that has no place in this bill.
This is a bad bill that can't be fixed. It should be defeated by the House. I urge my colleagues to oppose H.R. 2289.
Mr. Chairman, I have a statement from the administration where they have indicated their displeasure with this bill and the fact that they are going to recommend vetoing it.
I reserve the balance of my time.
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Mr. Chairman, I yield myself such time as I may consume.
With all due respect to my colleagues who have been claiming that the bill does this and does that, there are a lot of groups that have a different view.
There are over two-hundred-and-some groups that disagree with how the impacts of these bills were going to affect the markets, including the chairman of the Commodity Futures Trading Commission, who are the people who actually have to administer this law.
And we have a letter from the chairman that has a completely different point of view than Mr. Scott has and others in terms of how this will impact the situation. According to the chairman, you know, he is opposed to this. He says: ``I believe that many of the provisions in this bill before the committee are either unnecessary or impose requirements on the Commission that would make it harder to fulfill their mission. The bill limits the agency's ability to respond quickly to both market events and market participants. It will make it more difficult for us to make adjustments to rules and achieve greater global harmonization of swaps rules. With respect to the provisions pertaining to commercial end users' concerns, the agency has sufficient authority to address the goals outlined in the legislation and in most cases has already done so.''
He also states: ``I have concerns that title II of the bill includes language that would complicate the agency's longstanding statutory requirements to consider costs and benefits in its rulemaking, imposing additional, unworkable standards and creating confusion that is likely to lead to more lawsuits instead of policy grounded in data-driven analysis. Had this language been in effect, it would have been harder for the agency to positively respond over the past 10 months to market participants' concerns. Title II also imposes procedural requirements on the agency that, to my knowledge, are not followed by any other independent agency. These changes would make it difficult to manage the agency and to ensure accountability and could weaken the Commission for administrations to come.''
So there is a disagreement of opinion about how this bill will actually impact the marketplace and how it will actually work. And if, as was claimed, it wasn't going to have any effect, I would be here supporting it.
In my opinion, this is going to have significant impacts on the way the Commission does its work, and I think it is going to do more harm than good.
I reserve the balance of my time.
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Mr. Chair, I think I made clear my position. I was hoping that we could work out a bill here that could have support across the board, but I just think that there are areas we have gone into with this bill that are going to cause more harm than good, and I think it is not a good bill. It is not the kind of bill that we need to give the Commission the reauthorization that they need to do their job, so I ask my colleagues to oppose the bill.
I yield back the balance of my time.
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