Rep. Conaway introduces bipartisan bill to update CFTC cost-benefit analysis
U.S. Representative K. Michael Conaway (R-Texas) has introduced a bipartisan bill that would require the Commodity Futures Trading Commission to quantify the costs and benefits of future regulations and orders. The bill, H.R. 1003, would also mandate that the commission quantify the impact of market liquidity, a marked change from the current policy of just “considering” costs.
Rep. Conaway, chairman of the House Agriculture Subcommittee on General Farm Commodities and Risk Management, also introduced this legislation in the 112th Congress, where it was reported out of the House Agriculture Committee by voice vote.
“The American people deserve to know the implications of new regulations impacting the futures industry. Just as President Obama’s executive order directed government agencies to evaluate the cost of regulations on jobs and the economy, this bipartisan legislation will ensure the CFTC conducts a comprehensive qualitative and quantitative analysis of any future proposed regulations.
“I look forward to working with both my colleagues on both sides of the aisle to ensure the commission provides certainty to the marketplace on any future regulations. The commission’s actions must not artificially drive up the cost of conducting business and interfere with the proper functioning of our domestic financial system,” Rep. Conaway said.
The legislation would also update the commission’s current requirements to require the examination of the impacts on the previously unregulated swaps markets, a necessary addition because of new authority given to the CFTC under Dodd-Frank. It also would require the CFTC’s chief economist be involved in the cost-benefit analysis, a recommendation made by the commission’s inspector general. Only future proposed rules would be affected; the legislation would not require retroactive analysis of pending proposals.
Reps. Scott Garrett (R-N.J.), Jim Jordan (R-Ohio), Patrick McHenry (R-N.C.) and David Scott (D-Ga.) are original cosponsors of the legislation.
“The staggering number of new regulations from CFTC will have serious effects on job creation in this country. It’s clear to everyone, except, apparently, the CFTC. It is imperative that economists conduct adequate cost-benefit analysis before regulations are unleashed on our economy,” said Rep. Patrick McHenry, chairman of the House Financial Services Committee’s Oversight and Investigations Subcommittee.