House Floor Votes on the Consumer Protection and End -User Relief Act
House of Representatives
Floor Consideration of H.R. 4413
Consumer Protection and End-User Relief Act
June 24, 2014
Key Topics & Takeaways
- H.R. 4413, Consumer Protection and End-User Relief Act, passed the House by vote of 265 – 144.
- This bill would reauthorize the CFTC through 2018 and make several significant changes to the way the CFTC operates as a commission and regulates derivatives and swaps under the Dodd-Frank Act.
- The following amendments were approved and included in the text of the bill:
- Amendment 1 – DeFazio – Approved by Voice Vote.
- Amendment 3 – DelBene, Gibson, Vargas – Approved by Voice Vote.
- Amendment 7 – Fincher – Approved by Voice Vote.
- Amendment 8 – Garrett – Approved by Vote of 252 – 158.
- The following amendments were rejected:
- Amendment 2 – Jackson Lee – Rejected by Vote of 163 – 249.
- Amendment 4 – Waters – Rejected by Vote of 168 – 242.
- Amendment 5 – Moore – Rejected by Vote of 173 – 239.
- Amendment 6 – Jackson Lee – Rejected by Vote of 177 – 233.
- A motion to recommit, offered by Rep. Ann Kuster (D-N.H.), was rejected by vote of 191-220. It sought to require the CFTC to curb excessive speculation in the markets, require the CFTC to report when companies move their operations overseas, and ensure that foreign business comply with U.S. laws to prevent manipulation.
Representatives
- Rep. Frank Lucas (R-Okla.)
- Rep. Colin Peterson (D-Minn.)
- Rep. Jeb Hensarling (R-Texas.)
- Rep. Maxine Waters (D-Calif.)
- Rep. Richard Hudson (R-N.C)
- Rep. David Scott (D-Ga.)
- Rep. Austin Scott (R-Ga.)
- Rep. Rosa DeLauro (D-Conn.)
- Rep. Mike Conaway (R-Texas)
- Rep. Carolyn Maloney (D-N.Y.)
- Rep. Doug LaMalfa (R-Calif.)
- Rep. Rodney Davis (R-Ill.)
- Rep. John Sarbanes (D-Md.)
- Rep. Peter DeFazio (D-Ore.)
- Rep. Shelia Jackson Lee (D-Texas)
- Rep. Suzan DelBene (D-Wash.)
- Rep. Gwen Moore (D-Wis.)
- Rep. Steve Fincher (R-Tenn.)
- Rep. Scott Garrett (R-N.J.)
Statements on H.R. 4413
Rep. Frank Lucas (R-Okla.), Chairman of the House Agriculture Committee and sponsor of the legislation, stated that H.R. 4413 is a bill that has been “years in the making” and noted that the House Agriculture Committee has held numerous hearings with a variety of stakeholders, including the commissioners of the Commodity Futures Trading Commission (CFTC), to ensure that all views were heard.
Lucas noted that five of the provisions in the bill have passed the House floor with strong bipartisan support and stressed that the legislation would provide more market certainty for end-users and would promote economic growth.
Rep. Colin Peterson (D-Minn.), Ranking Member of the House Agriculture Committee, stated that the bill “strikes the necessary balance to actually become law” and would “better protect” end-users, including farmers and ranchers, who use derivatives to hedge market risk.
Peterson addressed concerns with the bill’s cost benefit provision by noting that the bill seeks to impose similar requirements to an Executive Order (13563) on cost-benefit procedures signed by President Obama. He also addressed concerns that the cost benefit provision would allow financial institutions to challenge the CFTC on their rules in court more often by saying that it is “industry nature” to fight regulation and that the financial services industry “will continue to sue the CFTC regardless of whether we change the cost-benefit standards or not.”
Peterson also addressed the cross-border provision, explaining that the bill states that if the CFTC and the Securities and Exchange Commission (SEC) do not agree on a rule then “the current regulations stay in place.”
Rep. Jeb Hensarling (R-Texas.), Chairman of the House Financial Services Committee, said the cross-border provision of the bill, reflecting H.R. 1256, would “simplify and rationalize” regulations across the U.S. and foreign markets to address the “troubling prospects” of dealing with conflicting regulations from the CFTC and SEC.
Rep. Maxine Waters (D-Calif.) voiced strong opposition to the bill, saying it would undermine the CFTC’s authority and “hamstring” the agency’s ability to regulate. Waters added that the bill would impose “heavy administrative hurdles” and increase litigation risk “under the guise of” cost-benefit analysis and would “open new avenues” for special interest groups to “endlessly” challenge the CFTC in court.
Rep. Richard Hudson (R-N.C) explained that a provision in the bill reflects legislation he sponsored (H.R. 3814) which would require Commission level action for the swap activity threshold to change, noting that this threshold will automatically reset to $3 billion if no action is taken.
Rep. David Scott (D-Ga.) voiced his support for the bill and noted that the cross-border provision would only apply to the nine foreign jurisdictions with the largest derivatives markets. He said the SEC and CFTC are currently at “loggerheads” and the “first order of business” is to get the agencies to agree on a rule.
Rep. Austin Scott (R-Ga.) noted that a bill he co-sponsored (H.R. 634) is included in the bill and would provide end-users with exemptions from clearing and margin requirements.
Rep. Rosa DeLauro (D-Conn.) voiced opposition to the bill, saying it “caters to special interests” and fails to address the “flawed funding mechanism” that the CFTC is currently subject to.
Rep. Mike Conaway (R-Texas) supported the bill, saying it would make the CFTC staff more accountable and responsive to the views of all commissioners and would strengthen the agency’s rulemaking process.
Rep. Carolyn Maloney (D-N.Y.) voiced opposition to the bill, saying it would impose unnecessary burdens on the CFTC and that the cross-border provisions could undermine confidence in U.S. markets by deferring regulation to foreign jurisdictions with insufficient rules in place.
Rep. Doug LaMalfa (R-Calif.) noted that his bill H.R. 1038, included in the legislation, protects against increases in electricity prices and passed the House unanimously.
Rep. Rodney Davis (R-Ill.) noted that his bill H.R. 4430, included in the legislation, would provide relief to customers who deal in illiquid and sparsely-traded swaps by providing a reporting delay, thus reducing their market exposure.
Rep. John Sarbanes (D-Md.) voiced strong opposition to the legislation, saying it would help lead to another financial crisis and undercut the oversight of the CFTC.
Amendment 1 – DeFazio – Approved by Voice Vote
Rep. Peter DeFazio (D-Ore.) stated that his amendment would require the CFTC to conduct four studies on the effects of high frequency trading in the derivatives and futures markets to determine if this activity creates discrepancies between market participants or creates market volatility.
Lucas stated that he sees no problem with these studies and supported the amendment.
Amendment 2 – Jackson Lee – Rejected by Vote of 163 – 249
Rep. Shelia Jackson Lee (D-Texas) stated that her amendment would seek to clarify the basic information of the entities that the CFTC regulates, including their size and assets under management.
Lucas said that in a time of tight budgets, the CFTC should not waste resources on such a study that has “no practical use.”
Amendment 3 – DelBene, Gibson, Vargas – Approved by Voice Vote
Rep. Suzan DelBene (D-Wash.) explained that her bipartisan amendment states that a court shall confirm the CFTC’s assessment of costs and benefits of its rulemakings. She said it would limit the ability of individuals and firms to challenge the CFTC in court based on its cost-benefit analyses.
Lucas supported the amendment, saying it builds on enhancements of the cost-benefit analysis sections of the bill by allowing a court to affirm the decisions made by the CFTC.
Amendment 4 – Waters – Rejected by Vote of 168 – 242
Waters stated that her amendment would “modestly improve” the “onerous” cost-benefit analysis provision of the bill by prohibiting judicial review of cost-benefit analyses, in the same way the President’s Executive Order does.
Conaway opposed this amendment, saying the CFTC “too often ignored” the essential requirement of having cost-benefit analysis as part of its rulemaking.
Amendment 5 – Moore – Rejected by Vote of 173 – 239
Rep. Gwen Moore (D-Wis.) stated that her amendment would “preserve the ability of the CFTC to regulate while maintaining reasonable cost-benefit analysis.” She stated that the overall bill is a “Trojan Horse” that seeks to deregulate and “put taxpayers back on the hook.”
Conaway opposed the amendment, saying he would understand Moore’s argument if she sought to strike the entire cost-benefit section but noted that it replaces this requirement with a “sense of Congress” that the costs and benefits are required to be considered. He stressed that the provision in the bill would be a prospective change and would keep all of the CFTC’s Title VII rulemakings in place.
Amendment 6 – Jackson Lee – Rejected by Vote of 177 – 233
Jackson Lee stated that her second proposed amendment would preserve exiting law where legal challenges to regulations are reviewed by a district court and can then be appealed to a court of appeals. She said the amendment would reduce the ability of the industry to undermine Dodd-Frank Act reforms.
Lucas opposed the amendment, saying that in crafting H.R. 4413 he worked with Peterson to ensure that judicial review was “on the same footing” as review of SEC laws, to alleviate any confusion that the current discrepancy has caused.
Amendment 7 – Fincher – Approved by Voice Vote
Rep. Steve Fincher (R-Tenn.) stated that his amendment would require the Comptroller General of the U.S., in consultation with the Inspector General of the CFTC, to study the efficiencies in leasing and rental costs of the CFTC. He explained that only one third of the CFTC’s Kansas City office is being used resulting in expenditures of $63 million for vacant offices.
Peterson voiced no opposition to this amendment.
Amendment 8 – Garrett – Approved by Vote of 252 – 158
Rep. Scott Garrett (R-N.J.) stated that his amendment would remove duplicative registration requirements of Registered Investment Companies (RICs) because they are already registered with the SEC and do not typically resemble commodity pools. He said this amendment would help to ease the burden on the CFTC and allow the agency to put more resources towards it current workload.
Peterson voiced opposition to this amendment and noted that the industry, as represented by the Investment Company Institute (ICI) and the U.S. Chamber of Commerce, lost a court case on this topic. He said that since the industry lost in court, they are seeking to address the issue through Congress. He expressed concern that the amendment would “permanently remove” the ability of the CFTC to regulate these companies.
Garrett clarified that the amendment would “do nothing” to take away the CFTC’s enforcement authority and seeks only to change the registration requirement.
David Scott supported the amendment, noting that it stops duplicative registration requirements.
For more information on this bill, please click here.
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House of Representatives
Floor Consideration of H.R. 4413
Consumer Protection and End-User Relief Act
June 24, 2014
Key Topics & Takeaways
- H.R. 4413, Consumer Protection and End-User Relief Act, passed the House by vote of 265 – 144.
- This bill would reauthorize the CFTC through 2018 and make several significant changes to the way the CFTC operates as a commission and regulates derivatives and swaps under the Dodd-Frank Act.
- The following amendments were approved and included in the text of the bill:
- Amendment 1 – DeFazio – Approved by Voice Vote.
- Amendment 3 – DelBene, Gibson, Vargas – Approved by Voice Vote.
- Amendment 7 – Fincher – Approved by Voice Vote.
- Amendment 8 – Garrett – Approved by Vote of 252 – 158.
- The following amendments were rejected:
- Amendment 2 – Jackson Lee – Rejected by Vote of 163 – 249.
- Amendment 4 – Waters – Rejected by Vote of 168 – 242.
- Amendment 5 – Moore – Rejected by Vote of 173 – 239.
- Amendment 6 – Jackson Lee – Rejected by Vote of 177 – 233.
- A motion to recommit, offered by Rep. Ann Kuster (D-N.H.), was rejected by vote of 191-220. It sought to require the CFTC to curb excessive speculation in the markets, require the CFTC to report when companies move their operations overseas, and ensure that foreign business comply with U.S. laws to prevent manipulation.
Representatives
- Rep. Frank Lucas (R-Okla.)
- Rep. Colin Peterson (D-Minn.)
- Rep. Jeb Hensarling (R-Texas.)
- Rep. Maxine Waters (D-Calif.)
- Rep. Richard Hudson (R-N.C)
- Rep. David Scott (D-Ga.)
- Rep. Austin Scott (R-Ga.)
- Rep. Rosa DeLauro (D-Conn.)
- Rep. Mike Conaway (R-Texas)
- Rep. Carolyn Maloney (D-N.Y.)
- Rep. Doug LaMalfa (R-Calif.)
- Rep. Rodney Davis (R-Ill.)
- Rep. John Sarbanes (D-Md.)
- Rep. Peter DeFazio (D-Ore.)
- Rep. Shelia Jackson Lee (D-Texas)
- Rep. Suzan DelBene (D-Wash.)
- Rep. Gwen Moore (D-Wis.)
- Rep. Steve Fincher (R-Tenn.)
- Rep. Scott Garrett (R-N.J.)
Statements on H.R. 4413
Rep. Frank Lucas (R-Okla.), Chairman of the House Agriculture Committee and sponsor of the legislation, stated that H.R. 4413 is a bill that has been “years in the making” and noted that the House Agriculture Committee has held numerous hearings with a variety of stakeholders, including the commissioners of the Commodity Futures Trading Commission (CFTC), to ensure that all views were heard.
Lucas noted that five of the provisions in the bill have passed the House floor with strong bipartisan support and stressed that the legislation would provide more market certainty for end-users and would promote economic growth.
Rep. Colin Peterson (D-Minn.), Ranking Member of the House Agriculture Committee, stated that the bill “strikes the necessary balance to actually become law” and would “better protect” end-users, including farmers and ranchers, who use derivatives to hedge market risk.
Peterson addressed concerns with the bill’s cost benefit provision by noting that the bill seeks to impose similar requirements to an Executive Order (13563) on cost-benefit procedures signed by President Obama. He also addressed concerns that the cost benefit provision would allow financial institutions to challenge the CFTC on their rules in court more often by saying that it is “industry nature” to fight regulation and that the financial services industry “will continue to sue the CFTC regardless of whether we change the cost-benefit standards or not.”
Peterson also addressed the cross-border provision, explaining that the bill states that if the CFTC and the Securities and Exchange Commission (SEC) do not agree on a rule then “the current regulations stay in place.”
Rep. Jeb Hensarling (R-Texas.), Chairman of the House Financial Services Committee, said the cross-border provision of the bill, reflecting H.R. 1256, would “simplify and rationalize” regulations across the U.S. and foreign markets to address the “troubling prospects” of dealing with conflicting regulations from the CFTC and SEC.
Rep. Maxine Waters (D-Calif.) voiced strong opposition to the bill, saying it would undermine the CFTC’s authority and “hamstring” the agency’s ability to regulate. Waters added that the bill would impose “heavy administrative hurdles” and increase litigation risk “under the guise of” cost-benefit analysis and would “open new avenues” for special interest groups to “endlessly” challenge the CFTC in court.
Rep. Richard Hudson (R-N.C) explained that a provision in the bill reflects legislation he sponsored (H.R. 3814) which would require Commission level action for the swap activity threshold to change, noting that this threshold will automatically reset to $3 billion if no action is taken.
Rep. David Scott (D-Ga.) voiced his support for the bill and noted that the cross-border provision would only apply to the nine foreign jurisdictions with the largest derivatives markets. He said the SEC and CFTC are currently at “loggerheads” and the “first order of business” is to get the agencies to agree on a rule.
Rep. Austin Scott (R-Ga.) noted that a bill he co-sponsored (H.R. 634) is included in the bill and would provide end-users with exemptions from clearing and margin requirements.
Rep. Rosa DeLauro (D-Conn.) voiced opposition to the bill, saying it “caters to special interests” and fails to address the “flawed funding mechanism” that the CFTC is currently subject to.
Rep. Mike Conaway (R-Texas) supported the bill, saying it would make the CFTC staff more accountable and responsive to the views of all commissioners and would strengthen the agency’s rulemaking process.
Rep. Carolyn Maloney (D-N.Y.) voiced opposition to the bill, saying it would impose unnecessary burdens on the CFTC and that the cross-border provisions could undermine confidence in U.S. markets by deferring regulation to foreign jurisdictions with insufficient rules in place.
Rep. Doug LaMalfa (R-Calif.) noted that his bill H.R. 1038, included in the legislation, protects against increases in electricity prices and passed the House unanimously.
Rep. Rodney Davis (R-Ill.) noted that his bill H.R. 4430, included in the legislation, would provide relief to customers who deal in illiquid and sparsely-traded swaps by providing a reporting delay, thus reducing their market exposure.
Rep. John Sarbanes (D-Md.) voiced strong opposition to the legislation, saying it would help lead to another financial crisis and undercut the oversight of the CFTC.
Amendment 1 – DeFazio – Approved by Voice Vote
Rep. Peter DeFazio (D-Ore.) stated that his amendment would require the CFTC to conduct four studies on the effects of high frequency trading in the derivatives and futures markets to determine if this activity creates discrepancies between market participants or creates market volatility.
Lucas stated that he sees no problem with these studies and supported the amendment.
Amendment 2 – Jackson Lee – Rejected by Vote of 163 – 249
Rep. Shelia Jackson Lee (D-Texas) stated that her amendment would seek to clarify the basic information of the entities that the CFTC regulates, including their size and assets under management.
Lucas said that in a time of tight budgets, the CFTC should not waste resources on such a study that has “no practical use.”
Amendment 3 – DelBene, Gibson, Vargas – Approved by Voice Vote
Rep. Suzan DelBene (D-Wash.) explained that her bipartisan amendment states that a court shall confirm the CFTC’s assessment of costs and benefits of its rulemakings. She said it would limit the ability of individuals and firms to challenge the CFTC in court based on its cost-benefit analyses.
Lucas supported the amendment, saying it builds on enhancements of the cost-benefit analysis sections of the bill by allowing a court to affirm the decisions made by the CFTC.
Amendment 4 – Waters – Rejected by Vote of 168 – 242
Waters stated that her amendment would “modestly improve” the “onerous” cost-benefit analysis provision of the bill by prohibiting judicial review of cost-benefit analyses, in the same way the President’s Executive Order does.
Conaway opposed this amendment, saying the CFTC “too often ignored” the essential requirement of having cost-benefit analysis as part of its rulemaking.
Amendment 5 – Moore – Rejected by Vote of 173 – 239
Rep. Gwen Moore (D-Wis.) stated that her amendment would “preserve the ability of the CFTC to regulate while maintaining reasonable cost-benefit analysis.” She stated that the overall bill is a “Trojan Horse” that seeks to deregulate and “put taxpayers back on the hook.”
Conaway opposed the amendment, saying he would understand Moore’s argument if she sought to strike the entire cost-benefit section but noted that it replaces this requirement with a “sense of Congress” that the costs and benefits are required to be considered. He stressed that the provision in the bill would be a prospective change and would keep all of the CFTC’s Title VII rulemakings in place.
Amendment 6 – Jackson Lee – Rejected by Vote of 177 – 233
Jackson Lee stated that her second proposed amendment would preserve exiting law where legal challenges to regulations are reviewed by a district court and can then be appealed to a court of appeals. She said the amendment would reduce the ability of the industry to undermine Dodd-Frank Act reforms.
Lucas opposed the amendment, saying that in crafting H.R. 4413 he worked with Peterson to ensure that judicial review was “on the same footing” as review of SEC laws, to alleviate any confusion that the current discrepancy has caused.
Amendment 7 – Fincher – Approved by Voice Vote
Rep. Steve Fincher (R-Tenn.) stated that his amendment would require the Comptroller General of the U.S., in consultation with the Inspector General of the CFTC, to study the efficiencies in leasing and rental costs of the CFTC. He explained that only one third of the CFTC’s Kansas City office is being used resulting in expenditures of $63 million for vacant offices.
Peterson voiced no opposition to this amendment.
Amendment 8 – Garrett – Approved by Vote of 252 – 158
Rep. Scott Garrett (R-N.J.) stated that his amendment would remove duplicative registration requirements of Registered Investment Companies (RICs) because they are already registered with the SEC and do not typically resemble commodity pools. He said this amendment would help to ease the burden on the CFTC and allow the agency to put more resources towards it current workload.
Peterson voiced opposition to this amendment and noted that the industry, as represented by the Investment Company Institute (ICI) and the U.S. Chamber of Commerce, lost a court case on this topic. He said that since the industry lost in court, they are seeking to address the issue through Congress. He expressed concern that the amendment would “permanently remove” the ability of the CFTC to regulate these companies.
Garrett clarified that the amendment would “do nothing” to take away the CFTC’s enforcement authority and seeks only to change the registration requirement.
David Scott supported the amendment, noting that it stops duplicative registration requirements.
For more information on this bill, please click here.