As part of the Dodd-Frank financial reform law, the CFTC was charged with writing rules that would restrict unregulated speculation in trades of futures contracts, including those for oil and gas. Under the law, the CFTC has the ability to limit speculation by setting position limits, which set a maximum amount a single speculator could control in a market.
Nelson pointed out in his letter that these rules were supposed to be finalized more than a year ago, but have been slowed due to "intense pressure from industry lobbyists." He also suggested the CFTC may be too cozy with the industry it regulated, calling it a "revolving-door relationship."
Nelson's office noted that before coming to the CFTC, Gensler was an executive at Goldman Sachs. He also served in the Treasury Department under President Clinton and was an adviser to now-retired Sen. Paul Sarbanes (D-Md.).
The CFTC finalized rules on position limits in October, but cannot put them into action until it writes rules in conjunction with the Securities and Exchange Commission (SEC) that defines a number of relevant terms. Gensler has said publicly several times that he supports getting the limits in place.
Nelson's letter is the latest in a concerted campaign by Democrats to crack down on oil speculation. When gas prices spiked last spring, Democrats including Nelson called on the CFTC to implement rules quickly curbing speculation.
And last month, Sen. Bob CaseyBob CaseyPennsylvania GOP rep announces bid for Casey's Senate seat We need to pass the Anti-Semitism Awareness Act to fight hate and bigotry At the table: The importance of advocating for ABLE MORE Jr. (D-Pa.) sent a letter to Gensler again calling for the implementation of those rules.
“Consumers shouldn’t be forced to pay higher prices at the pump because of speculative bets on Wall Street,” he said.
While the CFTC has lagged in implementing that provision of Dodd-Frank, it is not alone. As of Monday, regulators have missed roughly 70 percent of the deadlines laid out in the law, according to the law firm Davis Polk.
The CFTC has said it is hard at work implementing the financial overhaul and has called on Congress to substantially increase its budget to meet its new responsibilities.
This post updated at 5:13 pm.