House Republicans push to make Dodd-Frank tweak law

 

House Republicans are pushing the Senate to take up a bill tweaking financial regulations that has already been unanimously passed by the House.

The lawmakers pointed to recent regulatory relief from the Commodity Futures Trading Commission as proof of the need for the bill, which would exempt public utilities from having to register as a swap dealer.

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House Agriculture Committee Chairman Frank Lucas (R-Okla.) and Rep. Doug LaMalfa (R-Calf.) pointed to the move as proof their bill, which accomplishes a similar goal, needs to become law.

"I am pleased the CFTC has reconsidered its regulatory treatment of public utilities under the Dodd-Frank Act. However, a No-Action Letter is not the rule of law. This approach means CFTC reserves the right to change its mind and regulate these entities as swap dealers in the future,” said Lucas. “It's time for Majority Leader [Harry] Reid to pass the House bill or its Senate companion so that millions of Americans have certainty that the Dodd-Frank Act will not increase their electric bills.”

The House unanimously passed the bill in June, but the Senate has failed to act on it or a companion measure offered by Sen. Joe Donnelly (D-Ind.).

The push comes as the CFTC is putting in place new rules on derivatives transactions, including increased monitoring. Under previous CFTC rules, non-financial entities could engage in up to $3 billion in swap activities as part of an effort to hedge against risk. But swaps entered into with a public utility were limited to just $25 million.

Earlier this month, the CFTC issued a “no action letter” stating that it would exempt swaps entered into with a government-owned utility.

Skeptics of the financial overhaul have long argued that new regulations on derivatives aimed at curbing risky trading activity on Wall Street could improperly impinge on end users like farmers and airlines who rely on the financial tools to guard against commodity price fluctuations. 

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