By Peter Schroeder - 04/08/14 11:26 AM EDT
President Obama's pick to head the Commodity Futures Trading Commission took a step closer to confirmation Tuesday.
The Senate Agriculture Committee signed off on Timothy Massad to serve as the financial regulator’s next chairman by a voice vote. The panel also approved a pair of nominees to serve as CFTC commissioners, Sharon Bowen and J. Christopher Giancarlo.
If confirmed, Massad would take the reins of a small agency with big responsibilities. The Dodd-Frank financial reform law gave the regulator responsibility for overseeing the complex multitrillion dollar derivatives marketplace for the first time.
Bowen and Giancarlo were also approved by the panel on a voice vote. But Sen. Saxby Chambliss (R-Ga.) said he opposed Bowen’s selection, calling her “unqualified.” Bowen previously served as the acting chair of the Securities Investor Protection Corporation (SIPC). If confirmed, she would fill a vacancy created by Bart Chilton, the CFTC’s most liberal member.
Shortly after the committee approved her pick, Sen. David Vitter (R-La.) announced he would place a hold on Bowen's nomination. Vitter has long been critical of how SIPC has handled compensation for victims of the Ponzi scheme run by Allen Stanford. Vitter said he would hold up Bowen's nomination until she "adequately addresses" his concerns.
The three faced relatively little opposition in their confirmation hearing, and now need to be approved by the full Senate to join the regulator. Gary Gensler, the former head of the CFTC, left the agency at the beginning of the year.
The CFTC was also the subject of attention on the House side, as top lawmakers on the House Agriculture Committee unveiled legislation to reauthorize the regulator, whose authority technically expired on Sept. 30, 2013.
The legislation would give the CFTC another five years of congressional approval to do its work, and also make some specific tweaks to its operations in response to recent criticisms.
Chairman Frank Lucas (R-Okla.) and Rep. Collin Peterson (Minn.), the ranking Democrat on the committee, blessed the legislation.
The CFTC has come under fire for the high-profile collapses of a pair of financial firms that put customer funds at risk — MF Global and Peregrine Financial. The bill would require customer funds to be electronically confirmed, and subject firms to greater reporting requirements when moving large amounts of customer money around.
The bill would also require the CFTC to conduct cost-benefit analysis of any new regulations. In addition, so-called “end users” of derivatives — commercial entities that rely on derivatives to hedge risk, as opposed to financial players trading derivatives in search of profits — would receive relief from some Dodd-Frank provisions aimed at cracking down on risk in the derivatives marketplace.
The House panel hopes to consider the bill at a business meeting Wednesday.
This post updated at 1:39 pm.