House passes CFTC reauthorization

The House passed legislation Tuesday to reauthorize funding for the Commodity Futures Trading Commission through 2019.

Passage fell on a vote of 246-171 despite concerns from Democrats that it would impede the CFTC’s ability to regulate the derivatives marketplace in the aftermath of the Dodd-Frank Wall Street reform law.

The measure includes provisions to reform the CFTC’s rulemaking process, such as prohibiting the CFTC from issuing policy statements, guidance or interpretive rules that have the effect of law without providing a public notice and comment period. 

{mosads}It would also establish policies meant to protect consumers, including requirements for regulators to electronically confirm customer account balances at depository institutions and for firms to file annual reports with regulators.

House Agriculture Committee Chairman Michael Conaway (R-Texas) said it “provides relief from unnecessary red tape for the businesses that make things in our country.”

Democrats particularly objected to a provision in the bill that requires cost-benefit analyses for proposed regulations.

“This is, in my opinion, all cost and not a lot of benefit unless you’re one of the nine big banks who, as far as I’m concerned, have not learned a thing from the financial crisis,” said Rep. Collin Peterson (D-Minn.), the top Democrat on the House Agriculture Committee.

President Obama issued a veto threat against the bill in part because of concerns it “offers no solution to address the persistent inadequacy of the agency’s funding.”

“[T]he funding the Congress has provided for it over the past five years has failed to keep pace with the increasing complexity of the nation’s financial markets,” the White House said in a Statement of Administration Policy.

The nonpartisan Congressional Budget Office estimated that the measure would cost $1.1 billion over the 2016-2020 period.

The House passed similar legislation last June, but the Senate never took it up for consideration.

Congress last reauthorized the CFTC as part of the 2008 farm bill, but the policy expired in 2013.