Customer Protection and End User Relief Act

Floor Speech

BREAK IN TRANSCRIPT

Mr. LUCAS. Mr. Chairman, I yield myself as much time as I might consume.

Mr. Chairman, I rise today in strong support of H.R. 4413, the Customer Protection and End User Relief Act.

This is a bipartisan bill to reauthorize the Commodity Futures Trading Commission that I introduced along with my colleagues, Ranking Member Collin Peterson and chairman and ranking member of the Subcommittee on General Farm Commodities and Risk Management, Mike Conaway and David Scott.

This bill is years in the making, and I want to thank my colleagues on both sides of the aisle for all of the hard work that they have put in to get us to this point.

Throughout this process, the committee, as well as the Subcommittee on General Farm Commodities and Risk Management, held numerous hearings, heard from a variety of stakeholders with a wide variety of perspectives.

We heard from end users representing farmers, ranchers, manufacturers, energy firms, and utilities. We

heard testimony from every CFTC Commissioner and even foreign regulators. We also heard from exchanges, futures customers, and numerous other market participants.

Ultimately, we developed legislation to reauthorize and reform the CFTC in a way that would not only improve operations at the agency, but also protect customers from another market failure, as we saw with MF Global or PFGBEST.

Our efforts will also increase certainty in the marketplace and provide a more balanced approach to regulations impacting job creators.

I am proud to say this overwhelmingly bipartisan bill passed unanimously out of the Agriculture Committee by a voice vote.

First of all, H.R. 4413 will better protect farmers and ranchers who use the futures markets to manage their risk by cementing several new and existing protections into law.

These protections are designed to restore confidence in the marketplace following the failure of MF Global and PFGBEST, where customers, who thought their money was safely segregated, suffered severe financial loss due to the illegal use of their funds.

Such protections include requiring firms to calculate and report customer account balances electronically to regulators, requiring firms who become undercapitalized to immediately notify regulators, and imposing strict reporting and permission requirements before the movement of a customer's funds from one account to another.

Now, as for the reforms of the Commission, H.R. 4413 reauthorizes the appropriations to the agency through 2018. Furthermore, the bill strives to enhance the efficiency of the Commission operations and ensure all Commissioners' voices are heard in the regular order of a well-reasoned rulemaking process.

For example, H.R. 4413 closely follows an executive order issued by President Obama to improve the quality of cost-benefit analysis performed by the Commission prior to promulgating rules; requires division directors to serve at the pleasure of the entire Commission, rather than solely at the whim of the chairman; and clarifies the judicial review process of agency rules.

The Commission reform title also calls for the development of a much-needed strategic technology plan to enhance market surveillance and the interpretation of collected data.

Importantly, H.R. 4413 also provides much-needed relief to end users. Those are the market participants who account for only 10 percent of the swaps market and had nothing to do with the 2008 financial crisis, yet represent 94 percent of U.S. job creators, including farmers, ranchers, manufacturers, energy firms, and utilities.

Due to the consideration of the Dodd-Frank Act, Congress clearly intended to exempt end users from some of the most costly new regulations. However, the CFTC has narrowly interpreted the law, resulting in burdensome and often arbitrary compliance requirements which have negatively impacted end users by making it more difficult and costly to manage the risks associated with their businesses.

To address these concerns, H.R. 4413 includes provisions which relieve business owners from arbitrary and costly record-keeping requirements, allow businesses to continue successful fuel-hedging strategies, and prevent the physical delivery of commodities from being unnecessarily regulated as swaps.

H.R. 4413 provides help to America's job creators by including five carefully crafted measures designed to enhance market certainty, which have previously passed the House of Representatives Agriculture Committee and the United States House of Representatives, with overwhelming bipartisan support, three of which received over 400 votes in favor.

In closing, the Customer Protection and End User Relief Act is a wide-ranging, bipartisan CFTC reauthorization bill that provides a blueprint for the newly elected Chairman and Commissioners to use in making numerous improvements at the Commission, better protects futures customers, and reduces burdens on America's job creators. I urge each of my colleagues to join me in supporting this bipartisan legislation.

I reserve the balance of my time.

BREAK IN TRANSCRIPT

Mr. LUCAS. Mr. Chairman, I yield myself what time I might consume.

Mr. Chairman, I would like to remind all of my colleagues that once again the House Agriculture Committee, in the tradition of the House Agriculture Committee, has worked very diligently to address issues that are of great impact on rural America and on our national economy. In that tradition of bipartisanship--call it nonpartisanship if you want--Mr. Peterson and I, Mr. Conaway, Mr. Scott have worked in full committee and subcommittee together to craft what is a reasonable, logical set of proposals to address some real issues out there.

Any of you who have observed this process know that the committee is not timid in trying to do the right thing; and we have a track record of however long it takes, however hard it is, to do the right thing.

Now, some will say this piece of legislation may or may not have an impact on the decisionmaking process in some other body. I would just note to you, we have identified, through all of the hearings and all the testimony and all the input from within government and without government, that there are some things that need to be done. With this piece of legislation, we will encourage progress on those issues.

I urge all of my colleagues, vote for H.R. 4413. Move the process along; help us get ultimately to a product that will address these problems. This is a rather substantial impact on the national economy. If we don't do the things that we are proposing in the Agriculture Committee that we do, harm will be done, job creation will be impacted, every consumer and every working person will feel the effects negatively. So pass the bill. Pass the bill.

With that, Mr. Chairman, I yield back the balance of my time.

BREAK IN TRANSCRIPT

Source