Last week the House Agriculture Committee held a public hearing to review the impact of derivatives reform on end users and smaller financial institutions. This hearing came at a pivotal point in the implementation of Title VII of the Dodd-Frank Act, as the Commodity Futures Trading Commission moves from proposing rules to finalizing regulations.
Members of the Committee heard from a diverse group of witnesses representing community banks, public power companies, rural electric co-ops and manufacturers who expressed concerns that the CFTC's regulations may go too far, imposing unnecessary costs on their businesses. The witnesses expressed concern that these costs would be passed on to their customers in the form of higher costs.
House Agriculture Committee Chairman Frank Lucas, R-Okla., said witnesses confirmed concerns that overreaching proposals will negatively impact the very businesses that the country is relying on to create jobs. If a rural electric cooperative finds itself in the same regulatory category as Goldman Sachs, Lucas says the CFTC simply doesn't have it right. Lucas said it's important to bring some balance and common sense back to this process.
Meanwhile, Senate Agriculture Committee Chairwoman Debbie Stabenow, D-Mich., says the Commodities Future Trading Commission needs thoughtful and independent voices to prevent another financial crisis and protect markets that are critically important for growing the economy and creating jobs. Stabenow's comments came during a confirmation hearing for Mark Wetjen who has been nominated to replace CFTC Commissioner Mike Dunn.
Stabenow says Wetjen's nomination comes at a time that the CFTC continues to both implement important reforms and monitor our commodity markets for manipulation, fraud and abuse. She said the CFTC is important to the daily lives of Americans, noting whether it's paying for gas at the pump or paying for food to feed families, when markets don't work consumers feel the pain.
Stabenow also said the CFTC's role in overseeing our financial markets has significant implications for businesses around the world and the ability for companies to grow and create jobs. She says she has told the White House she expects a smart, thoughtful, independent voice at the Commission in this position.