Washington, D.C. – Today, Chairman Mike Conaway (TX-11) again questioned the varied impacts of Dodd-Frank implementation during a hearing of the Subcommittee on General Farm Commodities and Risk Management. During the hearing, the subcommittee continued examination of the impact of the multitude of new rules proposed by the Commodity Futures Trading Commission (CFTC) by listening to testimony from the General Counsel of the Commission as well as a panel of industry participants. Chairman Conaway made this statement following the hearing:
“The CFTC has proposed an array of rules that, as they currently stand, exceed Congressional intent and demonstrate a lack of regulatory focus amid a shortage of resources. Further exacerbating the problem is the Commission’s seemingly complete disregard of conducting a comprehensive cost-benefit analysis. It is incumbent upon the Commission to begin gravitating towards prioritizing their regulatory focus on mitigating systemic risk in a manner that represents Congressional intent and takes heed to the overwhelming comments of concern by market participants thus far.”
The cost-benefit analysis undertaken thus far by the CFTC has represented a minimalist approach in an effort to simply tout compliance with the requirements of Section 15(a) of the Commodities Exchange Act (CEA). To date, projections of costs have been vague and inaccurate; in one instance when the CFTC has tried to quantify them, they were 4,000 times lower than estimates performed by stakeholders. Further, the CFTC has dedicated significant resources to proposing multiple rules which exceed what was required by Dodd-Frank or intended by Congress.
Conaway went on to say, “As we move forward adherence to the more comprehensive qualitative and quantitative aspects of the President’s Executive Order and a calculation of the impact of costs beyond entities that must directly comply with the proposed regulations would benefit all parties. Such an analysis and consideration would likely decrease interference of the proper functioning of our domestic financial system. Efforts undertaken by the CFTC should represent help, not hindrance, towards economic recovery.”
Chairman Conaway will continue to hold oversight hearings throughout the rulemaking process and implementation of the Dodd-Frank Act.
The General Farm Commodities and Risk Management Subcommittee has jurisdiction over the commodities exchanges; program and markets related to cotton, cottonseed, wheat, feed grains, soybeans, oilseeds, rice, dry beans, peas, lentils, the Commodity Credit Corporation; risk management, including crop insurance; and specialty crops.
