The House moved first on reauthorization of the Commodity Futures Trading Commission (CFTC) and the Senate also is considering introducing its own bill later this year, top agricultural committee members shared Tuesday.
Monday a bipartisan package called the Customer Protection and End-User Relief Act was proposed by Reps. Frank Lucas (R., Okla.), Michael Conaway (R., Texas) and David Scott (D., Ga.) and would reauthorize the CFTC and also improve the operations of the agency. The package also looks to go after some of the provisions in Dodd-Frank that have brought unforeseen implications to end users, such as farmers who use the futures market for hedging.
Another component of the bill requires the CFTC to quantify the costs and benefits of future regulations and orders.
Lucas said with the era of former CFTC commissioner chairman Gary Gensler coming to an end and the way of doing business via no action letters, Lucas felt it was important for the committee to look at rational steps to address end user concerns.
Scott, who is the ranking member of the subcommittee on General Farm Commodities and Risk Management, said after meeting with the current nominee to lead the agency – Timothy Massad – “it is clear that the bill will bring reforms and codify many institutional regulations that the industry has already begun to take.”
The House bill is scheduled for mark-up in the House Agriculture Committee Wednesday and leadership expects if the bill proceeds without major changes that it will continue to obtain broad bipartisanship support.
Lucas had said he had hoped the House’s proposal would urge the Senate to take its own action on CFTC reauthorization so that they two bodies could conference and provide a final bill. Senate Agriculture Committee chairwoman Debbie Stabenow (D., Mich.) played down any thought that the Senate would look to do just a one-line reauthorization of the agency without trying to make any changes.
Stabenow said she too will be considering a broader reauthorization bill that provides protection to end users and protects market situations that occurred under the MF Global and Peregrine fallouts. She also mentioned her committee is looking at whether an insurance fund needs to be set up, which is something that has been discussed in Senate hearings on CFTC matters in the last year.
Stabenow said she was “hopeful” her committee would address CFTC reform this year, but also recognized that the further it got into the year it would be more difficult to accomplish with elections. She said there are common areas across party lines and chambers on how to help end users.
During a business meeting Tuesday, the Senate Agriculture Committee also approved by voice vote the three nominees for the vacant commissioner positions, which advances the nominees to the full Senate for final approval. The nominees include J. Christopher Giancarlo of New Jersey, Massad of Connecticut and Sharon Bowen of New York.
Stabenow expressed confidence in the nominees despite their lack of agriculture background. She said each of the nominees have been reaching out to agricultural groups and she also is strongly advocating for the agricultural advisory committee at CFTC to be reactivated.
In a statement from Senate Agriculture Committee ranking member Thad Cochran (R., Miss.) he hoped that before a vote on the Senate other senators would seek stronger assurances from Massad and Bowen “that their lack of experience in agriculture or futures markets will not hinder their ability to address the complex issues before the Commission.”
Cochran said he supports Giancarlo’s nomination because of his expertise in swaps markets, which are important to U.S. agriculture.
Stabenow said she expects individual votes on the candidates, but would also not object to combining all three in a package if necessary.