The House Agriculture Committee advanced legislation Thursday that would tweak how the Commodity Futures Trading Commission does business, despite protests from the regulator’s chief.
The legislation considered by the House Agriculture Committee advanced by voice vote, despite protests from Democrats and the Democratic head of the regulator about the bill, which they argued would bind the hands of the derivatives watchdog.
Rep. Collin Peterson (D-Minn.), the top Democrat on the panel who previously backed similar legislation in the last Congress, said Thursday the new measure would “muck up things at the commission.”
Saying that the “facts on the ground” had changed surrounding the regulator, Peterson went from a co-sponsor of a similar bill in the last Congress to a vocal opponent, warning its provisions risk “cutting the [CFTC] chairman off at the knees.”
And CFTC Chairman Tim Massad wrote to the panel to air his concerns about the bill, which would hand more power to commissioners on the regulator at the expense of the chairman, and require the regulator to take additional procedural steps before proposing new regulations.
In a letter sent Wednesday, Massad said he opposed the current bill drafted by Agriculture Committee Chairman Mike Conaway (R-Texas), calling many of its provisions either unnecessary or a burden on the regulator.
But Republicans argued the agency has mishandled the broad new powers it received as part of the Dodd-Frank financial reform law, which charged it with imposing first-ever rules on the financial derivatives marketplace.
In particular, lawmakers have argued for years that the new rules place too high a burden on the so-called end users of derivatives — farmers, ranchers and others who rely on derivatives to guard against price fluctuations — as opposed to the high-risk derivatives traders that many blamed for a large part of the financial collapse.
“Time and time again we have come to the conclusion that the burdens these rules place on our constituents are not appropriate to the regulatory gain,” said Conaway.
In his letter, Massad argued that the CFTC has already taken steps in house to address end user concerns, making the proposed legislative fixes unnecessary.
The changes were included as part of regulator legislation to reauthorize the CFTC, which needs to be passed every five years. However, it has been several years since the president actually signed a reauthorization bill, leaving the agency operating without that official legislative sign-off in the meantime.