As the House Agriculture Committee considers legislation that would renew the Commodity Futures Trading Commission (CFTC), Congresswoman Maxine Waters (D-CA), Ranking Member of the Financial Services Committee, expressed concern over provisions that would make changes to the Dodd-Frank Wall Street Reform Act, and weaken derivatives rules.
Waters released the following statement:
“This harmful proposal is an obvious attempt to hamstring an already underfunded agency charged with the critical oversight of our nation’s historically opaque and largely unregulated derivatives markets. The CFTC is working tirelessly to fulfill its mandate and hold bad actors accountable for market manipulation and fraud. This Republican measure ties the Commission’s hands, limits its ability to rein in Wall Street abuses and prevents it from policing overseas derivatives that are backed by U.S. taxpayers. Just like last year’s proposal, this bill is bad for farmers, manufacturers, businesses and the American people.”
Among other harmful provisions, the measure would make it much more difficult for the CFTC to regulate derivatives transactions involving foreign operations of U.S. banks. It does so by establishing hard-to-overturn presumptions that allow U.S. banks to substitute Dodd-Frank rules in favor of more lenient, foreign rules in foreign markets – despite the fact that the risks may come back to the United States.