More than 80 House Democrats are pushing Congress to support a strong exemption for commercial users of derivatives in the Wall Street overhaul bill.
In a series of letters, the lawmakers argue for a broad exemption for "end users" in the $600 trillion derivatives market that many blame for exacerbating the financial crisis in 2008. Manufacturers, financial firms and others have pushed for the exemption for companies that use derivatives to hedge a variety of business risks.
The lawmakers back the exemption that passed the House in December and argue that the Senate version of the bill could hurt local business and bigger manufacturers. A group of House and Senate lawmakers finishing the Wall Street bill in conference plan to take up the derivatives measures on Wednesday or Thursday.
The section has been one of the most heavily lobbied parts of the 2,000-page financial overhaul effort that Congress aims to pass before the July 4 recess.
The letters were organized by the centrist New Democrat Coalition, the New York congressional delegation, lawmakers on the House Agriculture Committee and Rep. G.K. Butterfield (D-N.C.).
"It is imperative that we recognize the unique needs of the end users that are the economic engines our local communities," House Agriculture members wrote. "We have serious concerns that the Senate passed derivatives title will impose higher costs on end users who had nothing to do with the financial crisis. This will significantly impair the ability of small and medium sized businesses to expand and will drive up consumer prices during these difficult economic times."
New Democrats and members of the New York congressional delegation have also raised concerns about a provision backed by Senate Agriculture Committee Chairwoman Blanche Lincoln (D-Ark.) that would require banks to push out their derivatives trading desks. That provision has been stridently opposed by banks and other business interests.