No Back Pay for Bergdahl Act

Mr. Speaker, I ask unanimous consent that all Members have 5 legislative days within which to revise and extend their remarks and to include extraneous material on H.R. 238.

Mr. Chairman, I yield myself such time as I may consume.

I rise in support of H.R. 238, the Commodity End-User Relief Act.

The Commodity End-User Relief Act is a bipartisan bill to reauthorize the Commodity Futures Trading Commission, to make much-needed regulatory reforms, and, most importantly, to make statutory changes to protect end users and give them access to the tools they need to manage their risks.

Over the past 4 years, the House Committee on Agriculture has held almost two dozen hearings that have examined the Commission and have investigated the impacts of the Dodd-Frank Act on derivatives markets. Our witnesses, many of whom were market participants who were struggling to comply with burdensome rules and ambiguous portions of the underlying statute, were consistent in their call for relief. To address their concerns, H.R. 238 makes reforms that fall into three broad categories: customer protections, Commission reforms, and end- user relief.

Title I of the bill protects customers and the margin funds they deposit at their Futures Commission Merchants by codifying critical changes made during the collapse and bankruptcies of MF Global and Peregrine Financial Group.

Title II makes meaningful reforms to the operations of the Commission to improve the agency's deliberative process. In doing so, it also requires the Commission to conduct more thorough and robust cost- benefit analysis to help get future rulemakings right the first time. While the CFTC is already required to consider costs and benefits of the rules it proposes, its work has been called into question by the CFTC's inspector general, who reported the Commission staff seemed to view the process as more of a legal one than an economic one.

End users are the businesses that provide Americans with food, clothing, transportation, electricity, heat, and much more. Companies that produce, consume, and transport the commodities that make modern life possible use futures and swaps markets to reduce the uncertainty that their businesses face. Farmers hedge their crops in the spring so they know what they will get paid in the fall. Utilities hedge the price of energy so they can charge customers at a steady rate. Manufacturers hedge the cost of steel, energy, and other inputs to lock in prices as they work to fill orders.

The fact is that no end user played any part in the financial crisis, and no end user currently poses a systemic risk to U.S. derivative markets. Yet, as the Agriculture Committee heard in countless hours of testimony, today it is more difficult and more expensive for them to manage their risks than it was for them 5 years ago. Some of these challenges are the result of ambiguities and oversights in the text of the Commodity Exchange Act, and some of them result from overzealous rulemakings by the Commission itself.

Today's legislation fixes statutory problems, like section 304, which amends the definition of ``financial entity'' to ensure that some end users don't lose their clearing exemption simply because a hedging strategy makes up for losses in a physical transaction; or like section 315, which makes small changes to the swaps' core principles to align them with conventions in the swaps industry, rather than the futures industry, easing compliance burdens for these newly regulated entities.

It also fixes problems that have grown out of the CFTC's own rulemakings. For example, section 308 sets aside a Commission rule that would automatically lower the transaction threshold triggering registration as a swap dealer. This costly, complex registration process was intended for large financial institutions, but because this registration threshold was set arbitrarily, it has swept up some commodity firms as well.

If the limits fall by 60 percent next year, it could sweep up to 100 more firms into the reach of Dodd-Frank. H.R. 238 would fix the level at its current $8 billion unless the Commission proposes a new rule with evidence of a needed reduction. Similarly, section 313 exempts religious pension plans and university endowments from a new rule that requires them to register as commodity pool operators simply because they use standardized hedging products.

What H.R. 238 does not do is roll back a single core tenet of title VII of Dodd-Frank. It does not change the execution, clearing, margining, capital, or reporting frameworks set up by that Act.

In fact, not a single witness who appeared before the House Committee on Agriculture ever asked us to fundamentally upend these principles. These are concepts that have been part of the swaps markets long before the financial reform happened. The Committee, the Commission, and the industry will continue to grapple with the details of these core tenets, seeking to provide the right mix of flexibility and oversight.

Before I close, I would like to thank members of the Agriculture Committee who sat through all these hearings and all the markups on this issue. Chairman Austin Scott and Ranking Member David Scott, two of my cosponsors on this legislation, have led most of the Committee's hearings on these issues, and they have done great work.

Together, we have put forward a bipartisan bill that makes narrowly targeted changes to provide relief from regulatory burdens on American businesses. The Commodity End-User Relief Act offers meaningful improvements for market participants without undermining the basic goals of title VII of Dodd-Frank, and it does so by providing the right relief to the right people.

I urge support of the Commodity End-User Relief Act with all its amendments, and I include for the Record letters of support from over 30 groups.

House of Representatives,

Committee on Financial Services,

Washington, DC, January 4, 2017.

Hon. K. Michael Conaway,

Chairman, Committee on Agriculture, Washington, DC.

Dear Chairman Conaway: I am writing concerning H.R. 238,

the ``Customer Protection and End-User Relief Act.''

As a result of your having consulted with the Committee on

Financial Services concerning provisions in the bill that

fall within our Rule X jurisdiction, I agree to forgo action

on the bill so that it may proceed expeditiously to the House

Floor. The Committee on Financial Services takes this action

with our mutual understanding that, by foregoing

consideration of H.R. 238 at this time, we do not waive any

jurisdiction over the subject matter contained in this or

similar legislation, and that our Committee will be

appropriately consulted and involved as this or similar

legislation moves forward so that we may address any

remaining issues that fall within our Rule X jurisdiction.

Our Committee also reserves the right to seek appointment of

an appropriate number of conferees to any House-Senate

conference involving this or similar legislation, and

requests your support for any such request.

Finally, I would appreciate your response to this letter

confirming this understanding with respect to H.R. 238 and

would ask that a copy of our exchange of letters on this

matter be placed in the Congressional Record during floor

consideration thereof.

Sincerely,

Jeb Hensarling,

Chairman.

Mr. Chair, I reserve the balance of my time.

Mr. Chairman, I yield 3 minutes to the gentleman from Arkansas (Mr. Crawford), who is the subcommittee chairman for the General Farm Commodities and Risk Management Subcommittee.

Mr. Chairman, I yield 3 minutes to the gentleman from Illinois (Mr. Davis), who is the subcommittee chairman for the Subcommittee on Biotechnology, Horticulture, and Research.

Mr. Chairman, I would like to point out for the Record that over the past two fiscal years, since 2013, the CFTC has received a 29 percent increase in funding. It has gone from $194 million to its current level of $250 million. I think you would be hard-pressed to find any other agency throughout this government that has gotten a 29 percent increase in its resources over that timeframe.

I now yield 3 minutes to the gentlewoman from Missouri (Mrs. Hartzler), a valuable member of the Ag Committee.

Mr. Chairman, I am proud to yield 3 minutes to the gentleman from Florida (Mr. Yoho), another valuable member of the Agriculture Committee.

Mr. Chairman, I would like to point out for the Record that the cost-benefit analysis rules in this bill are modeled after Executive Order 13563, which President Obama signed into the executive order status, and they are forward-looking. Nothing in our bill would require what might be a much-needed re-look at the Dodd-Frank rules done in the past. The cost-benefit analysis would require any future rulemaking to comply.

I yield 3 minutes to the gentleman from California (Mr. LaMalfa), another valuable member of the Agriculture Committee.

Mr. Chairman, may I inquire as to how much time is left on both sides.

Mr. Chair, I yield 3 minutes to the gentleman from Georgia (Mr. Austin Scott), who is the chairman of the Subcommittee on Commodity Exchanges, Energy, and Credit.

I have no further speakers.

Mr. Chairman, may I inquire as to who has the right to close?

Mr. Chairman, I yield myself such time as I may consume.

As I close, I want to remind us of the need to act today. But before I do, I also want to thank the ranking member. While we may vote differently on this bill, he and I generally work well together on a myriad of issues that face not only production agriculture, but rural America as well, and I thank him for his work, even though we may not vote exactly the same way today.

Over the past 4 years, the Committee on Agriculture heard dozens of witnesses about the upheaval end users have been facing while trying to use derivative markets in the wake of the post-crisis financial reforms. While this Congress took affirmative steps in Dodd-Frank to protect end users from harm, today it is clear that there is still work to be done. have been facing while trying to use derivative markets in the wake of the post-crisis financial reforms. While this Congress took affirmative steps in Dodd-Frank to protect end users from harm, today it is clear that there is still work to be done.

It isn't enough to simply raise these issues and hope that the CFTC will take care of them for us--for one, sometimes they cannot. There are numerous small oversights in the statute that have big implications for end users that we must correct in this legislation.

Currently, the CEA defines some utility companies as financial entities, stripping them of their status as end users. The Commission can't fix this.

The core principles for SEFs, which were added to the CEA by Dodd- Frank, were lifted almost word for word from the core principles for futures exchanges, even though swaps exchanges and futures exchanges operate completely differently and SEFs cannot perform many of the functions of a futures exchange. The Commission cannot fix this.

Certainly, the Commission can and has tried to paper over these problems, issuing staff letters explaining how it will deal with incongruities in the law. But that isn't good enough. We know the problems. We should fix them, and fix them now.

Sometimes, though, the problem isn't the statute. There are a number of end-user issues that we have heard testimony about which the CFTC will not fix, because the Commission simply disagrees with Congress about how to apply the law. We know these problems also.

The Commission has promulgated a rule that reduces the transaction threshold to be considered a swap dealer from $8 billion to $3 billion, a 60 percent decline, while it is still studying the matter. We should require that the CFTC complete the study and have a public vote on that matter.

The Commission has proposed a new method of granting bona fide hedge exemptions that is significantly narrower than the current method, upending longstanding hedging conventions for market participants. This proposal has the added disadvantage of being dramatically more labor intensive for the Commission. We should insist that historic hedging practices be protected.

The Commission has issued a new rule on ownership, control, and reporting that it knows isn't working. They have delayed its implementation for over 3 years by continuing to parcel out temporary reprieves. We should insist the Commission amend the rule so that market participants know definitively what their compliance obligations are.

The definition of swap does not exclude transactions that are wholly contained within a single company and not market facing. Regulators have used this leeway to require businesses and financial institutions to follow rules that are, quite frankly, inappropriate for risk management purposes and costly for the companies to use them. We should amend the statute, to make it clear that inter-affiliate transactions should not be regulated the same way as publicly transacted swaps.

The challenges facing businesses who hedge their risks in derivatives markets are real. Today we have an opportunity to fix some of those problems. Every dollar that a business can save by better managing its risk is a dollar available to grow that business, pay higher wages, and lower costs to consumers or protect investors.

Over the past week, over 30 organizations representing thousands of American businesses have voiced their support for the important reforms in the Commodity End-User Relief Act. Businesses from farm country to major manufacturers, to public utilities need every tool available to manage their businesses and reduce the uncertainties they face each day in today's global economy.

I urge my colleagues to support the Commodity End-User Relief Act, protect these companies, and ensure that they have the tools they need to compete in a global economy.

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

Mr. Chair, I include in the Record the following letters of support for H.R. 238:

January 11, 2017.

Hon. Paul Ryan,

Speaker, House of Representatives, Washington, DC.

Hon. Nancy Pelosi,

Democratic Leader, House of Representatives, Washington, DC.

Dear Speaker Ryan and Leader Pelosi: FIA supports H.R. 238,

the ``Commodity End User Relief Act''. Notably, this

legislation reauthorizes the Commodity Futures Trading

Commission (CFTC), which has been without statutory

authorization for almost four years. In addition to

reauthorizing the CFTC, Congress has historically taken the

opportunity of reauthorization to periodically review and

enhance the CFTC's authorities. This is essential in a

regulatory environment where the marketplace is extremely

dynamic. Given the constantly evolving structure to which

these regulatory authorities apply, it is prudent for

Congress to consider updating the statute in response to

market changes. We commend the House Committee on Agriculture

for efforts to build upon previous work and advance this

legislation.

H.R. 238 contains prudent internal risk controls to

safeguard market data and improved customer protections

sought by the market participants who rely on derivatives to

manage their risks. These are examples of policy enhancements

that have garnered tremendous favor in recent years as

evidenced by the bi-partisan support they have received in

previous Congressional sessions.

As noted above, the constant evolution of the markets

regulated by the CFTC has advanced even since the last time

the House of Representatives passed similar legislation,

which warrants the introduction of new statutory updates

expected to be offered as floor amendments. In particular,

FIA would like to lend our support to the bi-partisan Duffy/

Scott amendment protecting critical intellectual property

that is key to the innovative culture in the United States.

Additionally, we commend Congresswoman Hartzler for her

amendment recognizing the need to improve the quality of

information submitted for the Commission's surveillance and

large trader reporting programs.

We look forward to seeing this effort advance to the Senate

where we expect to have continued dialogue on refinements.

Sincerely,

President and CEO.

Mr. Chairman, I have an amendment at the desk.

Mr. Chairman, this is a pretty straightforward amendment. It proposes certain technical corrections within the bills. This would have normally been handled by the Rules Committee without need for a particular amendment, but because, as I said yesterday, the language of H.R. 238 is the exact language out of last year's June 15 bill, except for things that we dropped and limiting the appropriations to $250 million.

So, in the spirit of total transparency, I bring this amendment forward so the full body can work its will on this technical correction that would have normally been fixed by the Rules Committee.

I yield to the gentleman from Minnesota.

Mr. Chair, I yield back the balance of my time.

Mr. Chairman, the amendment I offer today will clarify amendments made to the Commodity Exchange Act by Dodd-Frank and require the CFTC to actually determine that position limits will, in fact, help reduce excessive speculation before they implement those new rules.

This past fall, my colleagues and I all ran for reelection promising to reduce government regulation and eliminate rules that needlessly burden the economy. As we consider the CFTC's ongoing work, we should look no further than the position limits rulemaking to begin that task.

Position limits are a tool that have merit and purpose in regulating the commodities market. Today, designated contract markets core principle V requires every U.S. exchange to impose, as is necessary and appropriate, position limits or position accountability levels on the contracts they offer.

Further, there are several agricultural contracts that have long- established and well understood federally mandated position limits. My amendment will not change any of those existing position limits regime.

Prior to Dodd-Frank, the law was clear: if the Commission wanted to impose position limits, it first had to make a determination that such limits would diminish, eliminate, or prevent the burdens of excessive speculation. Post-Dodd-Frank, the courts have ruled that additions to the statute have rendered it ambiguous.

Chairman Massad and I have disagreed for the past 3 years about how to read the statute. So today, my amendment fixes the ambiguity by affirmatively requiring the Commission to determine that position limits will serve to reduce the burdens of excessive speculation before they put them in place.

It is important that the Commission affirmatively determines the need for position limits because limits are an unmistakable burden on market participants.

The current position limits proposal will cost market participants substantially in time and money to comply with. Most importantly, it fundamentally changes the way hedgers can seek relief from the rules.

Agricultural producers and processors, power companies, and other commercial hedgers may have fewer bona fide hedges. What is more, they might get a hedge exemption, only to get a call from Washington telling them their hedge is invalid and they must liquidate their position.

The proposal also imposes new recordkeeping and reporting obligations on Futures Commission Merchants, exchanges, and market participants. Less well understood, but no less important, is the impact that position limits in later months might have on market liquidity.

Position limits do not have anything to do with the long-term price of commodities. The price of oil, no matter how high it climbs or how low it falls, is driven by supply and demand.

Congress itself recognized this when it characterized the burdens of excessive speculation as the sudden or unreasonable fluctuations or unwarranted changes in the price of a commodity. There is nothing sudden about a year's-long run-up or a year's-long decline in commodity prices.

That said, I agree there is a role for position limits to play in the management of our commodity markets, especially in managing the convergence of prices at the expiration of a contract. But limits are a regulatory tool to promote orderly markets, not a silver bullet to lower commodity prices for consumers.

As a tool, they need to be calibrated to the unique characteristics and historical patterns of each commodity. We cannot impose them in blind faith that more regulation automatically improves markets.

My amendment is agnostic about the merits of position limits, but it is clear about the need for the government to justify its rules that restrict economic activity.

As this Congress sets about reducing regulatory burdens, it is important that we start by requiring the CFTC to make a determination about the need for further regulations before they act.

Mr. Chair, I reserve the balance of my time.

Mr. Chairman, how much time do I have remaining?

Mr. Chairman, the CFTC prepared a draft report this past year. Quoting from page 142 of that draft, it says the Masters Hypothesis, which my colleague--who I do have great respect for--said the mere presence of passives distorts the marketplace, that is what Masters Hypothesis said. The CFTC found there are no reputable economic studies which fully endorse this view of how the commodity futures markets work.

I would like to close with this comment from another study by the chief economist: ``Comment letters on either side declaring that the matter is settled in their favor among respectable economists is simply incorrect. The best economists on both sides of the debate concede that there is legitimate debate afoot. This analysis paper documents that the academic debate amongst economists about the magnitude, prevalence, and pervasiveness of the risk of outsized market positions has reputable and legitimate standard-bearers for opposing positions.''

I agree with that in full. All we are asking the CFTC to do, Mr. Chairman, is to do the work to prove that the specific position list they want to implement, should they believe one is needed, that they would have to go through regular order, their regular order, to make that happen. I encourage a ``yes'' vote on the amendment.

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

Mr. Chairman, I support the gentleman's amendment.

I would point out that at the end of his amendment is an antievasion requirement which would allow the CFTC to watch for the kinds of things that

the gentlewoman from California was worried about in which foreign markets might be involved and other things. So there are, structured in the Lucas amendment, protections to avoid a crafty, interaffiliate kind of circumstance that she was concerned about.

Mr. Chairman, I move that the Committee do now rise.

Mr. Chairman, I yield myself such time as I may consume.

I rise in opposition to this bill. The bill last Congress went too far; and the one in this Congress, in my opinion, is going too far as well. The Commission, in my opinion, just needs a simple reauthorization. I urge Members to consider this when deciding how to vote on the amendments that will be debated here on the floor.

Title II actually makes it more difficult for the Commission to function, and I am also concerned that title III's cross-border rulemaking mandate will result in a race to the bottom for multinational banks in the swaps market, which is a global market.

On top of that, this bill caps the agency's yearly budget at $250 million for the next 5 years, and it does this when every single witness before the Agriculture Committee last year told us that the agency needs more resources to do its work. Well, maybe that is the whole point--that this bill will leave the agency to not doing much, and I think that would be a mistake. We tried that once before, and we found ourselves in a real mess.

Since we last discussed reauthorization, the market situation has changed, and the CFTC has addressed many of our concerns through rulemaking. Yet, the Agriculture Committee wasn't given the chance to consider these issues before the bill was rushed to the floor here today. So we are moving forward, once again, without regular order.

Again, I oppose this bill and urge my colleagues to vote ``no.''

I reserve the balance of my time.

Mr. Chairman, I yield 2 minutes to the gentlewoman from the Virgin Islands (Ms. Plaskett).

Mr. Chairman, I yield 4 minutes to the gentleman from Massachusetts (Mr. McGovern).

Mr. Chairman, I yield an additional 1 minute to the gentleman from Massachusetts.

Mr. Chairman, I yield 3 minutes to the gentleman from Arizona (Mr. O'Halleran), a new member to the House and a new member of the committee, and somebody who actually has experience in this business during his storied career.

Mr. Chairman, I yield 4 minutes to the gentlewoman from California (Ms. Maxine Waters), the ranking member of the Financial Services Committee.

Mr. Chairman, I reserve the balance of my time.

Mr. Chairman, if I could inquire from Chairman Conaway if he has any more speakers?

Is the gentleman prepared to close?

Mr. Chairman, I yield myself such time as I may consume.

In closing, I just wish that I could support a reauthorization bill, a clean bill for the CFTC that came through the Committee on Agriculture in regular order, but that is not what has happened.

I want to thank Chairman Conaway for his work in the last Congress, trying to find common ground, and I hope that we can get back to regular order in the future in the committee.

So again, Mr. Chairman, I urge my colleagues to oppose H.R. 238, and I yield back the balance of my time.

Mr. Chairman, I rise in opposition to this amendment.

Mr. Chairman, I rise in opposition to this amendment.

According to the CFTC, there is a drafting error in this amendment. I don't know exactly what it is, but they claim that there is a drafting error.

They also claim that it prohibits the CFTC from entering into leases going forward. They have expressed concern that this prohibition will affect their ability to enter into contracts with GSA in emergency situations and in order to sublease unused space.

This is one of the problems that I have with this bill in skipping the process of consideration in the Committee on Agriculture. If we would have done that, we would have had a chance to go over this and figure out exactly what is going on and who is right and who is wrong and what the situation is.

So, according to them, there are problems. We haven't gone through regular order, so I reluctantly oppose the amendment.

I yield back the balance of my time.

Will the gentleman yield?

Again, we are being told by the CFTC that this is not the case.

So, again, I don't know who is right or wrong, and I appreciate your offer to work with us to get to the bottom of this. Again, this is the problem that you have when you don't go through regular order.

Mr. Chairman, I rise in opposition to the amendment.

Mr. Chair, as was indicated, this places a $5 million limit on expenditures.

Again, I don't know if it is a drafting error or a difference of opinion, but, according to the CFTC, they claim that this amendment does things that were not explained and were not, in their opinion, made clear in the amendment. I don't know if they are calling it an error, or whatever it is, but there is a provision in there that says that this fund, once it gets above $100 million, can't go above $50 million.

So what this does is it basically limits the amount, once they get an amount to go back into the fund to replenish it. Again, I am not exactly sure who is right or who is wrong here, but it is another example of, I think, something that could have been avoided if this would have come through the Agriculture Committee in regular order.

The CFTC's education initiatives to help consumers protect themselves have been successful since this initiative began. The main expense is the Web site BrokerCheck. The whistleblower awards have increased recently and have been shown to be an effective method of enforcing the Commodity Exchange Act.

So, again, I would ask opposition to the amendment and again make the point that, had we gone through the committee process, we could have resolved this and probably been on the same page.

Mr. Chair, I yield back the balance of my time.

Mr. Chair, I support the amendment.

Mr. Chair, I claim the time in opposition to the amendment.

Mr. Chairman, I yield my time to the gentleman from Connecticut (Mr. Courtney), who was one of the original folks who brought this forward and one of the original authors, I think, of this provision. So I am going to let him carry the day on the opposition to this amendment.

Mr. Chairman, I claim the time in opposition to the amendment.

Mr. Chairman, this amendment addresses a problem that the CFTC is already well on its way to resolving in its proposed rule on automated trading. It requires that the Commission must vote to issue a subpoena to collect source code from high-frequency trading firms before the Commission can examine it.

I support the protections for the source code as intellectual property. I know Commissioner--soon to be Chairman, I think--Giancarlo has made this a priority, but this amendment I think is poorly drafted. Again, I don't want to harp on this too much, but it is something that could have been resolved had we had a committee process to do this bill.

One of the questions I have: I don't quite understand why this language is in the bill regarding similar intellectual property. The people at the CFTC, they don't know what this means, they don't know why you put that language in there, and they think it is going to cause a lot of problems. So we are trying to get at the source code. I have a problem with that. But why is this language in there?

Would the gentleman be willing to explain to me why that is in there and what it means?

I yield to the gentleman from Wisconsin.

Right.

What is that intellectual property that the CFTC might go after? They don't know what it is. I don't know what it is. Is there some reason?

The source code is what the issue is, right?

This isn't the government. It is the CFTC. It is a very specific part of the government.

Well, right. I don't know what it means. They think it is problematic, and I think it is another example of where we would have been better off with regular order.

I oppose the amendment.

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

Mr. Chairman, I claim the time in opposition.

Mr. Chair, I am not exactly sure why this is needed, but I don't have any problem with the amendment.

I yield back the balance of my time.

Mr. Chairman, I rise in opposition.

Mr. Chairman, this amendment contains several troubling drafting--some people call them--errors or, I guess, questions. It prevents the CFTC from enforcing noncompliance with the final rule that includes more forms than were targeted.

When we did our part of the Dodd-Frank bill, one of the things that I thought was really not controversial was that we were going to try to find out, once and for all, who owned all of these swaps; who was on what side of positions. This is what caused the problem in the first place with the financial meltdown. When Lehman Brothers went down and we allowed them to go broke, it created this big panic, AIG didn't know if they could cover their swaps or not, and it was going to unravel the whole situation because these firms that were trading didn't know who held what and what was going on. That was the underlying problem. So what we were trying to do is get some understanding of where everybody was in this market. When we were doing the bill, we made it very clear, and I put in the legislation, that end users were not covered. That shouldn't have been an issue.

The problem with this amendment is it looks like it is going to include more than just that. So, I guess, again, this is a final example in this bill of a process moving too quickly and a lack of regular order.

Finally, it contains a section on foreign privacy laws that could result in the agencies seeing a reduced scope of market in their surveillance activities that may not be the intention. But, again, without the chance to consider this provision in regular order, we are not sure, and concerns that some people have remain unaddressed. So this could have been resolved during the process. It hasn't been. In its present form, I oppose the amendment.

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

Mr. Chairman, I rise today in support of the Commodity End-User Relief Act. I thank the chairman for the countless hours that he and members and staff of the Ag Committee have put into crafting this bill, which is designed to provide relief to the end users across the Nation that were never intended to be burdened by these rules and regulations.

I have heard from many end users in my district about the need for commonsense reforms to our financial regulations that are encapsulated in this bill. These financial regulations affect entities and the people I represent and rely on every day, from the rural electric cooperatives that use these financial tools to keep energy prices as low and as stable as possible for rural Missourians, to the local grain elevators and farmers that manage their price risk using futures and options at a time when prices are low. And times are hard in farm country. Regulatory relief for Main Street is way past due on these regulations that were designed to regulate Wall Street.

During this debate, I have heard some of my colleagues' concerns that this bill has not followed regular order. But we have spent countless hours in briefings, hearings, and markups on this very bill. Many of us even took a trip to Chicago to visit the CFTC office and to tour key industry facilities. In the 6 years that I have served on this committee, we have held 22 hearings on the future of the Commission and the state of the derivatives industry. We held two separate markups on previous versions of this reauthorization in the 113th and 114th Congresses, followed by passage of these bills on the House floor. In fact, the bill we are taking up today is almost identical to the bill passed on this floor last Congress. Every single amendment to this bill offered by a Member of the House will be voted on today, including my amendment to provide relief to farmers, agricultural cooperatives, and grain elevators from burdensome reporting requirements. The process of considering the bill has been fair and open.

I thank the chairman for bringing up this much-needed bill to provide regulatory relief to my constituents through this fair and open process. I encourage my colleagues to support this bill.

Mr. Chairman, I have an amendment at the desk.

Mr. Chairman, I rise today to offer an amendment to bring certainty to farmers, agricultural cooperatives, and grain elevators across Missouri and the country that are having problems complying with burdensome reporting requirements at the CFTC. Dodd- Frank never intended to regulate end users like independent grain elevators who work on behalf of Missouri farmers to help manage their price risk. My amendment works to correct this oversight and provide a stable environment for all players in the industry.

My amendment is simple. It would require the Commission to address three outstanding concerns to the Ownership and Control Reports rule, better known as the OCR rule, before the Commission can begin enforcement, which, by the way, the CFTC is not enforcing presently. This industry currently is operating under a no-action relief letter, meaning the OCR rule is not being enforced due to the inability of the industry to meet the stringent requirements of the CFTC regulations. That could change, and the problem needs to be addressed.

Specifically, my amendment does three things. First, it increases the threshold from 50 to 300 contracts per day per commodity for those market participants that need to comply with this rule. This will exempt low-volume entities like grain elevators and small agricultural cooperatives from the reporting requirements for large trading firms and major players in these markets. Even with the new threshold established by my amendment, the CFTC will still gather ownership and control information on the major players and midsized traders.

Second, my amendment removes a small but very burdensome portion of the long list of reporting requirements under the final OCR rule. My amendment removes the natural person controller requirements which require farmer cooperatives and grain elevators to report specifically personally identifiable information on individual employees. The CFTC has never required such granular information for many of my constituent businesses, and such requirements are making Futures Commission Merchants much less willing to work with small and medium-sized entities in the countryside. Even with the small changes made by my amendment, the CFTC will still be properly equipped to track ownership and account control data across the market.

Finally, this amendment will require the CFTC to ensure that current regulations do not conflict with current foreign privacy laws. Having a large, open, liquid market is important to managing risk, and operating on an international basis is a valuable aspect of a commodity market. The CFTC should be responsible for dealing with other governments on privacy concerns. It is inappropriate to push that burden onto the firms and customers that it regulates.

This amendment is supported by a wide range of industry and farmers groups, and I encourage my colleagues to support my amendment to provide relief from the regulatory burdens of this rule on small cooperatives, grain elevators, and farmers who are merely hedging their legitimate market risk and serving their customers' interests.

Mr. Chairman, I reserve the balance of my time.

Mr. Chairman, I yield myself the remainder of my time.

Mr. Chairman, I would remind our colleagues that this rule is right now under a no-action relief letter because it isn't working, and that is what this amendment does is to fix this problem. So I believe this amendment is very important. It makes a few commonsense changes to the OCR rule that will provide regulatory relief to farmers, agricultural cooperatives, and grain elevators while allowing the CFTC to adequately regulate the futures industry.

So, Mr. Chairman, I urge my colleagues to support this amendment.

I yield back the balance of my time.

Mr. Chairman, I rise in strong opposition to H.R. 238, legislation to reauthorize the Commodity Futures Trading Commission, better known as the CFTC. Instead of working through regular order to produce an authorization bill that both Democrats and Republicans could have supported, the majority in this House rushed to the floor a deeply flawed piece of legislation that hamstrings the CFTC and undermines its ability to react to changing market conditions.

The burdensome requirements in this legislation and the lack of appropriate funding are nothing more than a misguided attempt by Republicans to make it more difficult for the Commission to function-- to make it harder to protect consumers and make it more difficult to rein in the abuses of Wall Street.

I strongly object to the authorization level in this legislation. Basically, my Republican friends are flat funding the CFTC for 5 years, and that is despite calls from the former and current chairman asking us to provide additional resources to the agency to enhance their ability to police Wall Street.

Now, Dodd-Frank significantly expanded the Commission's role in overseeing our financial markets, and the Commission has done its part to create rules that will help to prevent another financial crisis, despite the fact that Congress has not provided appropriate funding.

Now, I get it. My Republican friends don't like Dodd-Frank. Ever since they took back control of the House, they have tried to dismantle the law piece by piece, which was enacted to protect consumers and protect our markets in the wake of that terrible financial crisis that practically ruined our economy.

Now, Republicans say they don't like regulation, and it seems they especially don't like any regulation on Wall Street. Have they forgotten the recent financial crisis that nearly destroyed our economy? Have they forgotten who was primarily responsible for that crisis? Apparently, they have. Now, I am not for endless and unnecessary regulation. Nobody is. But I do think it is appropriate for us to create commonsense rules that protect our markets and protect our constituents' hard-earned dollars.

I find it troubling the Republican leaders in this House don't want to provide necessary resources to the Commission to patrol Wall Street. Without cops on the beat, who will ensure Wall Street actors aren't gaming the system and putting the economy at risk for another meltdown. I ask my Republican friends: When will Main Street take priority over Wall Street?

I also take issue with the various provisions of this bill that will both slow the agency's work and create new avenues for costly and lengthy legal battles.

By the way, implementing these provisions will cost the Commission an additional $45 million over the next 5 years and will require an additional 30 full-time employees. So in addition to underfunding an already overworked agency, we are creating a situation where even more resources will be needed to satisfy burdensome and unnecessary requirements. Now, that means fewer dollars for the Commission to carry out its core mission of combating abuse and fraud in our markets and ensuring end users, investors, and the public are protected.

Now, Mr. Chairman, our constituents didn't send us to Washington to ignore bad actors in our financial markets. They certainly didn't send us to Washington to create a regulatory environment that could put us on a path toward another downturn. So who are we here to represent, the Wall Street banks or our hardworking constituents who deserve elected Representatives who do everything in their power to prevent another financial crisis?

I would also like to say a few words about the cross-border requirements imposed by this bill, requirements that would hamstring the Commission's efforts to regulate the global swaps industry in cooperation with regulators around the globe.

My colleagues across the aisle keep saying that this bill is essential to help farmers, ranchers, utilities, and Main Street small business. But the farmers in this country don't have a London office to trade their swaps, they don't have a derivatives desk in Tokyo, and they aren't trading interest rate swaps in Geneva.

Mr. Chair, let's be clear about who the cross-border provision in this bill is designed to help. It isn't end users. It isn't farmers. It isn't manufacturers or utilities or Main Street businesses. It is the small group of multinational financial firms that have controlled the swaps market from the beginning. We have seen what happens when they are left to their own devices. Crises in the swaps market do not respect national borders and boundaries. And that is why our regulators from the Commission have been engaged with their international counterparts in crafting rules for these markets since 2009.

They should be encouraged in that effort in every way possible through funding and expansive authority to get the rules right. This bill provides neither.

Mr. Chairman, I urge my colleagues to oppose this misguided legislation.

Mr. Chairman, I thank Mr. Peterson and Mr. Conaway, with whom I did serve on the Agriculture Committee with for a number of years, and I recall well some of the discussion and debate as Chairman Gensler appeared before the committee on article 7 of the Dodd-Frank Act.

Although, I didn't author that position, former-Senator Dodd is a constituent of mine. So I guess that is close enough to the work that was done creating this section.

Again, let's be very clear about what this amendment does. It is not about clarifying anything. It is about stripping from the law article 7 of Dodd-Frank, which was a congressional mandate to establish position limits for speculative trading.

Again, this was not done in a vacuum. It was done because there has been an explosion of speculative trading that is taking place in commodities markets. We had testimony in the Congress back in 2010 that it had grown from 22 percent to 67 percent speculation on Wall Street. Goldman Sachs--when, again, we were dealing with close to $4 a gallon for gas--had a report which said that 27 percent of that price was due to speculation. So, Congress appropriately instructed CFTC to come back with a regulatory plan to limit speculative positions in a reasonable way.

Again, no one quarrels with the fact that end users, whether it is farms, ranchers, airlines, or businesses of all sorts, should be able to exercise options in market swaps.

In those instances, these are firms and businesses which actually take physical possession and control of the commodity. Again, what Goldman Sachs and other analysts had demonstrated is that what has been a burgeoning trend is that firms were beginning to take dominant position in markets that, again, were not even close or remotely involved in the actual production, processing, or use of the commodities that were in question.

So again, CFTC has begun an arduous, painful process of trying to craft a rule. In fact, just a few weeks ago, on December 5, the CFTC voted unanimously to again move that process along and come up with a draft of a balanced, reasonable rule, so it is not a dead-end situation.

As has been reported, what they basically were looking at was a fundamental or a basic limit of roughly about 25 percent of a commodity could not be controlled by one firm. The end users that I spoke to, as this rule has been making its way, actually think that the CFTC is being too generous in terms of allowing an individual firm to control up to 25 percent of a market. I think a lot of Americans would understand that that kind of position really would provide for an opportunity to manipulate market prices.

In fact, there are some end users who think the rule should be very simple, that you have to take actual physical possession of the commodity in order to be able to hedge a position or engage in a future option. Again, the CFTC did not go to that radical extreme. Again, they tried to listen to the thousands of comments--Chairman Gensler, Chairman Massad--to try to fashion a rule that allowed a healthy market but did not allow situations which were occurring during high gas and oil prices.

In Connecticut, we had home heating oil suppliers who were describing situations where the price of the heating oil by the time the truck left the garage and came back was going up 10, 15 cents just during that short period of time for no reason at all. There wasn't like a refinery explosion or some incident that was happening overseas. It was, again, the movement on Wall Street of people who were profiting not from use of the commodity but, in fact, just from the movement on the price. That is really what CFTC has been hard at work doing.

This amendment will basically shut that down. It is not a clarification. It basically takes away what was Congress' instruction to CFTC.

Again, I respectfully oppose this amendment. I think we should allow the Commission, which is going to have a Republican Chairman in a few weeks, to continue to work on this issue and to provide protection for the true end users, the people who actually use the commodities, as well as consumers. Whether it is those who get their home heating oil tank full, their gas tank full, whether it is farmers and ranchers who are dealing with things like feed costs, we should have a healthy system of making sure that individuals or firms cannot have a dominant position in terms of controlling commodities.

This is not an arcane, esoteric issue for Americans. This affects bread-and-butter issues in terms of how much they pay for essential goods and commodities for them and their families. I would strongly urge the Members to not accept this amendment. I urge a ``no'' vote.

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

Mr. Chairman, I demand a recorded vote.