Posted June 30, 2014
On Tuesday, the Consumer Protection End User Relief Act (H.R. 4413) was passed, authorizing the Commission Futures Trading Commission (CFTC) through 2018, according to a Delta Farm Press article by David Bennett available here. Farm Futures also published an article available here, the Wall Street Journal here, and Reuters here.
Forty-six Democrats and 219 Republicans passed the legislation. The Senate has yet to introduce companion legislation.
“I am pleased to have the support of my colleagues on a bill that touches nearly every part of the economy,” said Oklahoma Rep. Frank Lucas, chairman of the House Agriculture Committee. “This legislation reauthorizes the Commodity Futures Trading Commission through 2018 and ensures that the agency is working in the most efficient and effective way. It also cements key protections into law for futures customers, such as our nation’s farmers and ranchers, and reduces the regulatory load on end-users who represent 94 percent of American job creators.”
The White House opposes the bill stating that it “undermines the efficient functioning” of the CFTC and “offers no solution to address the persistent inadequacy of the agency’s funding,” which is supported by Senate Agriculture Committee Debbie Stabenow, D-Mich., according to Farm Futures.
“It is disappointing that the bill provides no additional funding mechanism and adds new layers of administrative burdens, hindering the agency’s ability to do its job and effectively regulate these markets,” said Stabenow.
The bill reauthorizes the agency’s mandate to reverse the CFTC’s strict rules on the U.S. businesses’ swaps with counterparties abroad, which would require a new regime with the Securities and Exchange Commission, according to Reuters.
Farmers and other small market players, who use futures to protect revenue from their crops against unpredicted market prices, would be exempted from some of the CFTC’s expensive new rules.
The CFTC would have to conduct a high-frequency trading study, ease restrictions against hedge-fund marketing to mirror looser Securities and Exchange Commission rules, and boost customer funds protection at futures firms. A review of the metals warehousing industry over the concerns of possible price manipulation would also have to be conducted, according to the Wall Street Journal.
For more information on commodity programs, please visit the National Agricultural Law Center’s website here.