Banking/Financial Institutions

Lew urges committee to halt Dodd-Frank tweaks

{mosads}The letter comes one day before Hensarling’s committee is set to vote on seven different bills which would alter or repeal portions of Dodd-Frank cracking down on derivatives. For example, one bill would allow foreign entities to be exempted from U.S. regulations on derivatives, so long as the regulations required by the home nation are “broadly equivalent” to U.S. requirements. Another bill would ease the “push-out” requirement for derivatives under Dodd-Frank, in which banks with federal deposit insurance are required to push derivatives trading to affiliates backed by their own capital.

Many of these bills have previously garnered bipartisan support — the “push-out” measure is co-sponsored by Rep. Jim Himes (D-Conn.), and a similar version of the bill introduced in the 112th Congress was approved by voice vote.

In his letter, Lew argued that regulators are still putting new derivatives regulations from Dodd-Frank into place, and argued that efforts to change the law now would result in upheaval.

“In many instances, legislation is premature and aspects would be disruptive and harmful to the implementation of key reforms,” he wrote. “We should allow the regulators to complete the ongoing rule makings, and then determine what changes, if any, might be necessary in certain areas.”

The panel previously considered similar versions of many of these bills in the 112th Congress, and several were ultimately passed by the full House, some with broad bipartisan margins. The bills did not gain any traction in the Senate, and then-Treasury Secretary Timothy Geithner also opposed them, saying they would “undermine the integrity” of regulators writing rules implementing the new controls.

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