H.Res. 40

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 thank the gentlewoman for yielding me the time.

Mr. Chairman, I rise in strong opposition to H.R. 78, the SEC Regulatory Accountability Act. This bill would require the SEC to do an absurd amount of time-consuming, duplicative cost-benefit analysis before they can even propose a rule. This is the fourth time, Mr. Chairman, that we are voting on this partisan bill because the previous three times the bill has been rejected by the Senate and President Obama has strongly opposed it.

But let's be clear about what this bill is not about. It is not about ensuring that the SEC conducts a cost-benefit analysis on the rules. If that were the case, then no legislation would be necessary. The SEC is already required to conduct a cost-benefit analysis and has already adopted internal guidance on economic analysis that mirrors the exact requirements of this bill before us today. So the problem is not that the SEC doesn't currently conduct cost-benefit analyses or that it does it poorly; the real goal of this bill is simply to give the industry more chances to sue the SEC on cost-benefit grounds when it issues rules the industry does not like. That is essentially the only thing that would change if this bill were signed into law.

The SEC's cost-benefit analysis would be the same, but the industry would have more opportunities to sue the SEC over alleged flaws in the cost-benefit analysis. And the threat of a lawsuit would force the SEC to divert even more of its scarce resources to cost-benefit analysis, which would delay the key reforms and undermine the SEC's ability to protect investors--their core mission.

So I urge my colleagues to oppose this bill, as they have in three previous votes before this body.

I reserve the balance of my time.

Mr. Chairman, I enter into the Record the following letters of opposition to H.R. 78 signed by the Consumer Federation of America, Americans for Financial Reform, the California State Teachers' Retirement System, and the Council of Institutional Investors. These institutions represent various groups such as investors, consumers, public pension plans, labor unions, and communities of color.

Consumer Federation

of America,

January 10, 2017.

Vote NO on H.R. 78, the ``SEC Regulatory Accountability Act''--Bill Would Paralyze the Agency's Ability to Protect Investors and Promote

Market Integrity

Dear Representative: This week the House is expected to

vote on H.R. 78, the ``SEC Regulatory Accountability Act.''

The bill imposes burdensome new rulemaking requirements that

would prevent the agency from responding in a timely manner

either to emerging threats in the marketplace or to industry

requests for guidance or legal interpretations. As such, it

threatens to undermine the stability and integrity essential

to healthy capital markets, with harmful consequences for

investors, capital formation, and the overall economy. I am

writing on behalf of the Consumer Federation of America to

urge you to vote no when the bill is brought to the floor for

a vote.

The bill is being promoted as a measure to enhance cost-

benefit analysis at the Securities and Exchange Commission

(SEC). And, in that regard, certain of the bill's

requirements are relatively benign, such as the requirements

that the agency discuss the nature and scope of the problem

it is intending to solve when it engages in rulemaking,

carefully analyze available alternatives, and consider the

costs of the various alternatives as well as their relative

effectiveness in determining on a course of action. But these

are things the SEC already does, having learned the painful

lesson that failure to do so can result in its rules' being

overturned in court. Indeed, both the Government

Accountability Office and the SEC's Office of

the Inspector General have in recent years praised the agency

for the extent and quality of its cost-benefit analysis.

Other of the bill's provisions are far more harmful. The

following are among the most serious problems with this

legislation:

It requires the agency to adopt, not the most cost-

effective regulatory approach, but the least burdensome

approach. As such, it prioritizes minimizing regulatory costs

over promoting regulatory effectiveness.

The bill requires the agency to consider a number of

specific factors in assessing regulations, including their

effect on efficiency, competition, and capital formation as

well as investor choice, market liquidity, and small

business. Not included are any specific requirement to assess

their impact on investor protection or market integrity,

stability, and transparency.

If the Conunission fails to address concerns raised by

``industry groups'' related to costs and benefits, it must

explain its reasons. There is no comparable requirement to

explain any decision not to address investor concerns.

It imposes these burdensome new requirements, not just on

regulations, but also on agency orders, interpretations, and

other statements of general applicability ``that the agency

intends to have the force and effect of law.'' Firms seeking

a timely response from the agency staff on issues important

to their business are likely to face significant delays if

the legislation is enacted.

It requires the agency to engage in a constant

retrospective review of all its regulations every five years,

regardless of whether there is any cause for concern with a

particular regulation. Since the bill doesn't include any new

funding authorization to provide for this review, and

Congress has been highly reluctant to provide funding

increases commensurate with the agency's workload, the

inevitable result is that the agency will be forced to take

resources away from other more important regulatory

priorities to fund this generally meaningless exercise.

While a reasonable and balanced analysis of costs and

benefits can promote effective rulemaking, this legislation

goes far beyond what is reasonable or balanced. It would tie

the SEC in procedural knots, keep its focus on an endless

review of existing rules rather than emerging issues, provide

endless grounds for legal challenge, causing a serious drain

on agency resources, and undermine the agency's focus on its

central mission of protecting investors and promoting market

integrity and stability. Indeed, the bill would exacerbate

rather than ameliorate the most serious short-comings in the

agency's current regulatory process--its inability to

complete rulemakings regarding pressing issues in a timely

manner.

For these reasons, we urge you to vote ``No'' when H.R. 78,

the ``SEC Regulatory Accountability Act,'' is brought to the

floor for a vote. The only ``accountability'' this

legislation promotes, is the SEC's accountability to the

firms it is supposed to regulate rather than the investors it

is supposed to protect.

Respectfully submitted,

Barbara Roper,

Director of Investor Protection.

Mr. Chairman, I yield 4 minutes to the distinguished gentleman from Texas (Mr. Al Green), a member of the Financial Services Committee.

Mr. Al GREEN of Texas. Mr. Chairman, I thank the gentlewoman for yielding.

I am absolutely amazed this legislation has progressed to this point. This is not a panacea. This is not legislation that will prevent some harm being done to mom-and-pops. This is about Wall Street. This is about multimillion-dollar corporations. It is not unusual here for those who would benefit from the use of those who live on Main Street, they would benefit from it by saying that the bill is for Main Street when in fact it is for Wall Street.

This bill should properly be labeled the bill that the SEC rulings would come under stagnation, litigation, and decimation as a result of, because the way the bill is worded, there will be much litigation, and that litigation will tie the SEC up in court for many years. That will create the stagnation

which will cause the SEC to be ineffective; and, as a result, the SEC, in terms of its rulemaking, will be decimated.

Let's talk for a moment about a cost-benefit analysis. That is a very simple formula that can be used if you want to refinance your home and you want to get a different interest rate over a different period of time. All of the numbers associated with it are quantifiable. But if you want to do cost-benefit analysis in terms of fraud prevention, the prevention of fraud is not quantifiable; it is not knowable.

Bernie Madoff made off with approximately $64 billion, and in so doing, he perpetrated one of the biggest frauds ever perpetrated on the United States of America, the American people. If we had a regulation in place to prevent that fraud that Bernie Madoff perpetrated, there would be no way of knowing that he would have perpetrated the $64 billion fraud. You can't quantify legislation that prevents the fraud.

If we had legislation in place to prevent the downturn in 2008, that would have prevented the 327s, the 228s, the teaser rates that coincided with prepayment penalties, the no-doc loans. If we had regulations in place to prevent it, then we would never have known the harm it would have caused the economy.

That is what this bill will do. It will put the SEC in a position such that it cannot produce the rules to prevent the fraud that we can never measure. It is not knowable how much fraud will be prevented by the rules that the SEC promotes and produces.

This legislation also does not allow the SEC to move at the speed of innovation. Innovation moves quickly. The SEC has to be able to produce rules to match the speed of innovation. This is why it was difficult to do something about what was happening to the economy leading up to 2008. We didn't have the speed necessary, and now we are going to put a further burden on the SEC such that the SEC won't be able to respond to these new products that are coming on the market. And make no mistake, they will come on the market.

The stock market crash of 1929 was something that rules and regulations could have prevented. They were not there. They put them in place. Glass-Steagall was one of them. It took 66 years, but they got Glass-Steagall. I don't know how long it is going to take them, but they intend to get Dodd-Frank. This is the first step in the direction of making Dodd-Frank impotent.

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

I would like to share with my colleagues and the American public how American organizations that work day in and day out to fight to protect investors, consumers, minorities, workers, and pension plans view this bill.

The director of investor protection of the Consumer Federation of America states: ``This legislation goes far beyond what is reasonable or balanced and, indeed, the bill would exacerbate, rather than end the most serious shortcomings in the agency's current regulatory process, its inability to complete rulemaking regarding pressing issues in a timely manner.''

The general counsel of Council of Institutional Investors stated: ``We believe the provisions of H.R. 78 would unnecessarily impede the ability of the SEC to issue proposals in furtherance of its mission, its mission to protect investors.''

Finally, the Americans for Financial Reform stated: ``This legislation is transparently an effort to paralyze the SEC and to empower Wall Street lawyers to overturn its decisions and sue and not to improve its analysis or decisionmaking process.''

I urge my colleagues to heed these warnings and to really hear what these representatives of the public are saying; and I urge them to vote ``no'' on the underlying bill.

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

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

My Republican colleagues, regrettably, want to impose cost-benefit analysis that tilts towards industry costs because they know something that they don't want the American people to know. An impartial cost- benefit analysis of Wall Street reform rules would inevitably demonstrate how wildly beneficial such rules are to the U.S. economy and to the lives of everyday Americans.

Earlier this week, the bipartisan think tank, Third Way, found that Dodd-Frank's bank capital rules will add $351 billion--as in B, billion--to the U.S. economy over the next 10 years. This report presents a cost-benefit analysis that shows that, while lending becomes slightly more expensive when banks are required to maintain higher capital levels, the benefits of mitigating another financial crisis greatly exceed any costs. This report is one of many which Republicans intentionally ignore.

Reducing the likelihood of another financial crisis does not come without cost, but the costs are worth it. Let us not forget the widespread human suffering that has been felt across this Nation because of the financial crisis. The 2008 financial crisis destroyed 8.7 million American jobs, wiped out $2.8 trillion in retirement savings of ordinary Americans, and led to the foreclosure, the loss--15 million Americans lost their homes due to financial mismanagement in this country.

If those aren't significant costs for policymakers to consider, then what else is?

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

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

I want to point out that with Dodd-Frank and the reforms that the Democrats put in place, our economy bounded back faster and stronger than all of Europe. And I must say that one of the areas that we need to work on, where we are falling behind in our economy, is exports. We need to support exports.

Despite all the talk that we hear from Republicans about enacting policies that support jobs and job creation, and the slew of tweets from the President-elect discouraging American companies from moving U.S. jobs overseas--and I support his efforts to stop our companies from going overseas--one proven job creator has remained on the sidelines, and that is the U.S. Export-Import Bank. This Bank has played a critical role in opening up international markets to U.S. exporters, which, in turn, helps create and preserve jobs here in America.

The export-import banks of our competitors are supported by those countries five times more than what we do here in America. In fact, the ability of the Export-Import Bank to even operate, even though it makes money and has succeeded in building up American exports, has been hamstrung by the leadership of my good friends and colleagues on the other side of the aisle.

In recognition of the Bank's success and supporting U.S. jobs over the past 80 years, in December of 2015 the House and the Senate voted with overwhelming majorities to reauthorize the Export-Import Bank. Despite this broad support, the Bank has remained hamstrung because, with three empty seats on its five-member board, the Bank lacks the quorum it needs in order to approve transactions over $10 million.

Although President Obama nominated two individuals to serve on the Ex-Im's bipartisan board, the Senate Republican leadership refused to consider them, and Ex-Im's board remains without a quorum. They can not approve these exports. I think it is a national scandal.

Indeed, it has been more than 18 months since the Export-Import Bank's board was last able to consider transactions, which has limited its ability to ensure U.S. workers and businesses of all sizes are able to compete around the world for contracts, as well as support jobs for the many small businesses that contribute to the supply chains for these high-value exports.

In fact, the bank currently has 50 transactions in its pipeline valued at nearly $40 billion, which, if approved, would support more than 100,000 American high-skill and high-wage jobs. I intend to bring this to the attention of the President-elect.

So, as we talk today about how these Republican bills will create American jobs, I think it is important that we look at the GOP's full record on job creation or, might I say in this case, job prevention. As their record shows, Republican leaders have been all too willing to let U.S. jobs slip away to our foreign competitors.

Until Congress restores Ex-Im to full functionality, U.S. companies selling expensive capital goods such as aircraft, locomotives, nuclear reactors, and turbines will remain at a unique competitive disadvantage because their foreign competitors all enjoy ample financing from their home-country export credit agencies--enough to easily knock U.S. companies out of the competition. This is unfair.

We cannot compete and win in the global economy unless we support our businesses. We will lose global market share in key sectors such as the satellite industry, aerospace, and telecommunications. We will lose tens of thousands of jobs as some of the biggest U.S. exports suffer declining overseas sales, and, eventually, some of

these companies would be forced to move jobs to where export credit is still available. We have seen this reported in the news daily where they are moving to our competitors.

So, in short, we need to support the Export-Import Bank. We need to not hamstring the SEC by requiring it to have unnecessary, time- consuming, duplicative rules that are already in place and that allow people to sue them more easily.

Mr. Chairman, I urge my colleagues on both sides of the aisle who care, as President-elect Trump does, about job creation to be opposed to this bill.

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

Mr. Speaker, by direction of the Committee on Rules, I call up House Resolution 40 and ask for its immediate consideration.

Mr. Speaker, for the purpose of debate only, I yield the customary 30 minutes to the gentleman from Colorado (Mr. Polis), my good friend, pending which I yield myself such time as I may consume. During consideration of this resolution, all time yielded is for the purpose of debate only.

General Leave

Mr. Speaker, I ask unanimous consent that all Members have 5 legislative days to revise and extend their remarks.

Mr. Speaker, on Tuesday, the Rules Committee met and reported a rule, House Resolution 40, providing for the consideration of two important pieces of legislation: H.R. 238, the Commodity End- User Relief Act, and H.R. 78, the SEC Regulatory Accountability Act.

The rule provides for the consideration of these measures under a structured rule and makes in order any amendment submitted to the House Rules Committee, including all five Democratic amendments to H.R. 78, as well as all eight amendments submitted for H.R. 238, allowing for a balanced debate on these very substantial issues.

H.R. 238 is essential to the smooth functioning of the American economy and is long overdue for enactment into law. This important legislation reauthorizes until 2021 the Commodity Futures Trading Commission, also known as the CFTC, which had its statutory authority lapse in 2013. The House passed the Commodity End-User Relief Act with bipartisan support in the 114th Congress, and a similar bill was also adopted in the 113th Congress, establishing a strong record of bipartisan support for this measure. Unfortunately, in both instances, the Senate failed to take up the legislation before the end of its respective Congress, which is why it is imperative that we pass this bill through both Chambers and send it to the President's desk.

After the financial crisis of 2008, practically everyone agreed that changes needed to be made to our financial services sector in order to protect families, farmers, small businesses, and our economy, as well as to prevent another crisis in the future. Like many of my colleagues, I have concerns with some of the reforms that were instituted in response to the crisis because they have put overly burdensome restrictions and regulations on our economy and our business communities. But like every major, comprehensive law, there are always unintended consequences that need to be addressed, and H.R. 238 does exactly that.

For example, the authors of Dodd-Frank argued the law's main purpose was to reduce systemic risk to our economy. However, I don't think anyone would argue that farmers who are simply trying to lock in a good price for their corn or their wheat are a systemic risk to the economy. Similarly, restaurant chains looking to make sure they have enough beef, enough pork, or enough potatoes to sell to their customers don't pose a systemic risk, just as utility companies seeking to ensure that they have adequate power supplies to meet the needs and demands of their ratepayers did not cause the financial crisis. Unfortunately, the current law imposes rules that treat all of these entities as major risks to our economy, and it imposes overly burdensome capital and paperwork requirements on them.

Mr. Speaker, critics may claim that this bill undermines consumer protections. However, this could not be further from the truth.

Title I of the legislation puts in place greater consumer protections, like requiring brokerage firms to notify investors before moving funds from one account to another in order to prevent abuses like those that occurred at MF Global prior to its bankruptcy.

Title II makes reforms to the CFTC and strengthens the cost-benefit analysis the Commission must perform when considering the impacts of its rules. Opponents have claimed that requiring cost-benefit analyses will open up the CFTC to lawsuits. However, H.R. 238 merely gives the CFTC a standard for writing good rules the first time, which will be a benefit for all of us.

Title III provides relief to the farmers, the restaurants, the manufacturers, the utilities, and other entities which rely on a steady supply of commodities and inherently want to avoid risk but have been caught up in the unintended consequences of the Dodd-Frank reforms. These users have a genuine need to use markets to hedge against bad weather, natural disasters, inflation, price shocks, and other unforeseen circumstances that could jeopardize their ability to serve their customers.

The rule also provides for the consideration of H.R. 78, the SEC Regulatory Accountability Act. This legislation replaces guidance adopted by the SEC in 2012 that currently governs the use of economic analysis in SEC rulemakings and requires the SEC to identify and assess the significance of problems prior to regulating. It directs the agency to conduct a review of existing regulations within 1 year of enactment--and then every 5 years thereafter--to determine the sufficiency, the effectiveness, and the burdens associated with their implementation. Further, H.R. 78 instructs the SEC's Chief Economist to conduct a cost-benefit analysis on regulations the agency is promulgating as well as to provide an explanation describing the SEC's decision-making process, including the implications of not taking the regulatory action.

Economic analysis is the cornerstone of prudent rulemaking and entails evaluating the qualitative and quantitative costs and benefits of proposed regulations as well as potential alternatives in order to determine the correct action an agency should take. We must ensure Federal regulators are thoroughly assessing both the need for the regulation and adequately evaluating its potential consequences-- intended as well as unintended--to prevent small businesses and job creators from being unnecessarily burdened by onerous Federal regulations.

Mr. Speaker, this is a good, straightforward rule, allowing for the consideration of two bills that will hold Federal agencies and their rulemaking processes accountable to the American people. Voters sent a clear message in November that they want a Federal Government that is smaller, less intrusive, and more discerning in its regulatory actions. House Republicans created our A Better Way agenda by listening to Americans about the ideas for our Nation, and the new, unified Republican government will continue our work to change the status quo and provide real progress for all Americans. The adoption of this rule and the passage of the underlying bills is yet another opportunity to show that we heard this message loud and clear and that we will reinforce our commitment to restoring the people's voice in our Federal Government.

I am proud to support the rule providing for the consideration of these measures, and I urge my colleagues to support the rule and the underlying bills.

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

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

First of all, in fact, if I could read from a letter I received this morning from over two dozen agricultural groups. In one sentence, it says: ``Thank you in advance for your support of this bill that is so important to U.S. farmers, ranchers, hedgers and futures customers.'' It is signed, like I said, by over two dozen organizations.

I include in the Record the letter I received this morning, I think, as did my colleague, Representative Polis, from over two dozen agricultural groups and associations located throughout the country in unanimous support of H.R. 238.

January 11, 2017.

Dear Member of the House of Representatives: The

undersigned organizations represent a very broad cross-

section of U.S. production agriculture and agribusiness. We

urge you to cast an affirmative vote on H.R. 238, the

``Commodity End-User Relief Act,'' when it moves to the floor

for consideration.

This legislation contains a number of important provisions

for agricultural and agribusiness hedgers who use futures and

swaps to manage their business and production risks. Some,

but certainly not all, of the bill's important provisions

include:

Sections 101-103--Codify important customer protections to

help prevent another MF Global situation.

Section 104--Provides a permanent solution to the residual

interest problem that would have put more customer funds at

risk--and potentially driven farmers, ranchers and small

hedgers out of futures markets--by forcing pre-margining of

their hedge accounts.

Section 306--Relief from burdensome and technologically

infeasible recordkeeping requirements in commodity markets.

Section 308--Requires the CFTC to conduct a study and issue

a rule before reducing the de minimis threshold for swap

dealer registration in order to make sure that doing so would

not harm market liquidity and end-user access to markets.

Section 311--Confirms the intent of Dodd-Frank that

anticipatory hedging is considered bona fide hedging

activity.

Thank you in advance for your support of this bill that is

so important to U.S. farmers, ranchers, hedgers and futures

customers.

Sincerely,

American Cotton Shippers Association, American Farm Bureau

Federation, American Feed Industry Association, American

Soybean Association, Grain and Feed Association of Illinois,

Kansas Grain and Feed Association, Michigan Agri-Business

Association, Michigan Bean Shippers, National Association of

Wheat Growers, National Cattlemen's Beef Association,

National Corn Growers Association, National Cotton Council.

National Council of Farmer Cooperatives, National Grain and

Feed Association, National Milk Producers Federation,

National Pork Producers Council, National Sorghum Producers,

Nebraska Grain and Feed Association, North American Millers

Association, Northeast Agribusiness and Feed Alliance, Ohio

AgriBusiness Association, South Dakota Grain and Feed

Association, USA Rice, Wisconsin Agri-Business Association.

Mr. Speaker, also, in response to just one of the points that my colleague brought up, in the first 2 weeks of this 115th Congress, the Speaker, as well as the chairman of the Rules Committee, Representative Sessions, has provided opportunity for all Members to appear before the Rules Committee, has invited all Members to submit amendments. In fact, I can gladly say and happily say that every amendment submitted on these two bills has been accepted, if they were proven to be germane.

In fact, one of the arguments made by my good friend is that the freshmen have not had an opportunity to weigh in on these two pieces of legislation. Actually, the young freshman from Maryland had an amendment brought forward, and it was accepted to bring for consideration on the floor. So I think the arguments fall hollow that Members have not had an opportunity to be heard.

Mr. Speaker, I yield 5 minutes to the gentleman from Texas (Mr. Conaway), the good chairman of the Agriculture Committee.

Mr. Speaker, while I applaud the optimism and enthusiasm of the gentleman from Colorado (Mr. Polis) about defeating the previous question, getting back to the debate on the rule, I have no further speakers, and I reserve the balance of my time.

Mr. Speaker, I yield myself the balance of my time.

Mr. Speaker, I certainly appreciate the discussion over the past few minutes. I believe that this rule and the underlying bills are strong measures that are important to the future of our country.

This rule provides for ample debate on the floor, the opportunity to consider and vote on both H.R. 238 and H.R. 78, as well as every amendment that was submitted to the House Rules Committee, which reflects the balanced, open, and deliberative process afforded by this rule.

H.R. 238 is a solid, substantial measure that will address several critical issues that the CFTC and end user are facing, while also addressing the CFTC's lapsed reauthorization with reauthorizing the Commission through 2021. While some opponents have called for an open rule, this structured rule makes all eight submitted amendments in order.

Mr. Speaker, no one wants to see complete deregulation of our financial services industries and our commodities and derivatives markets. However, it is critical that the regulations put in place are appropriate for our economy and our users. These rules have to provide safeguards and prevent systemic risk but should not hinder our entire economy with one-size-fits-all regulations.

As we have discussed today, the current rules place enormous compliance and financial burdens on small businesses, on farmers and ranchers, utilities, and manufacturers. They take these small, risk- averse entities and place them under the same regulatory scheme as large financial institutions and hedge funds. H.R. 238 will differentiate and exempt the end users who are not a cause of systemic risk--as these entities inherently want to avoid risk--and, thus, shouldn't be subject to the same rules and requirements as financial and investment firms that are less risk averse in nature.

The Commodity End-User Relief Act would make much-needed reforms at the CFTC to strengthen their rulemaking process and add commonsense consumer protections so these regulations are not a continual burden on our Nation's farmers and small businesses.

Mr. Speaker, the rule also provides for consideration of H.R. 78 under a structured rule and makes all five Democratic amendments in order. This legislation takes important steps to engrain a stronger commitment to economic analysis at the SEC, which will facilitate the promulgation of reasonable rules that do not unduly burden registered companies or negatively impact job creation. The measure will increase transparency and oversight, while facilitating additional analysis and reviews of existing regulations, which should be something that all Members of this body can support.

As elected Representatives, I believe we must ensure our regulatory framework is not politicized and that Federal regulators are thoroughly assessing both the need for the regulation as well as adequately evaluating its potential consequences. This bill takes important steps towards achieving all of these goals.

It is important to remember that the financial crisis was not caused by the farmer who grows the food you eat for dinner, or by the utility you buy electricity from, or by the people who provide the wood in your desk or the metal used in your car. I don't know of any reason why we should continue to treat them as if they were responsible, which is what the current law does and is what H.R. 238 seeks to correct.

Further, better informing the American people of the true impact of major regulations does nothing to diminish the ability of regulators to adequately address illegal or inappropriate activities but, rather, increases transparency and the efficacy of Federal rules, which is why passage of H.R. 78 is so critical both to our constituents and to our economy.

Mr. Speaker, this is a strong rule that provides for open and fair consideration of these vital pieces of legislation as well as every amendment that

was submitted to the House Rules Committee. I am proud to speak in favor of this rule, and I urge all of my colleagues to support House Resolution 40 and both of the underlying bills.

Mr. Speaker, I yield back the balance of my time, and I move the previous question on the resolution.

Mr. Chair, I rise today in support of H.R. 78, the SEC Regulatory Accountability Act, which would improve and strengthen the SEC's rulemaking process by requiring more rigorous economic analysis.

What exactly does that mean?

Well, an economic analysis is quite simple, frankly. It is a systemic approach to determine the optimum use of scarce resources involving comparison of two or more alternatives to achieve a specific objective under the given assumptions and constraints. That is a whole lot of words and jumbo. But what we need to do is make a comparison, what is going to be the benefit.

Economic analysis takes into account the opportunity costs of resources employed and attempts to measure, in monetary terms, the private and social costs and benefits of a project to a community, an economy, or to an individual.

In its simplest terms, the SEC would have to determine the costs and benefits of proposed regulations, as well as potential alternatives to determine a best direction forward, basically ensuring that the SEC is thoroughly assessing both the need for the regulation and adequately evaluating the potential consequences, both intended and unintended, and is there a benefit.

Mr. Chairman, requiring economic analysis by Federal regulators is not a partisan issue. In fact, both President Clinton and President Obama issued executive orders requiring regulators to ensure that their rules were maximizing and achieving a net benefit.

H.R. 78, the SEC Regulatory Accountability Act, would ensure consistent and effective application of the SEC's economic analysis guidance by building on the bipartisan effort to strengthen economic analysis requirements, as well as require a retrospective review of existing regulations for independent agencies like the SEC.

Specifically, the bill would enhance the SEC's existing economic analysis requirements by requiring the Commission to first clearly identify the nature of the problem that would be addressed before issuing a new regulation--too often, we are just shooting at a target that we don't even know is actually a target--and to prohibit the SEC from issuing a rule when it cannot make ``a reasoned determination that the benefits of the intended regulation justify the costs of the regulation.''

Additionally, H.R. 78 would require the SEC to assess the costs and the benefits of available regulatory alternatives, including the alternative of not issuing a regulation, and choose the approach that would maximize the net benefit. The SEC must also evaluate whether a proposed regulation is inconsistent or incompatible or duplicative of other Federal regulations.

In testimony before the Subcommittee on Capital Markets and Government Sponsored Enterprises last year, former SEC Commissioner Dan Gallagher noted that the SEC Regulatory Accountability Act would ``promote and improve economic analysis at the SEC and make the agency even more accountable to the investing public.'' He further testified that this bill ``will help ensure the economic analysis conducted by economists is firmly entrenched in every rulemaking the SEC conducts under the Federal securities laws.''

Mr. Chair, I commend the gentlewoman from Missouri (Mrs. Wagner) for introducing this important piece of legislation, which will equip the SEC with the necessary tools to ensure that all future SEC regulations will meet these standards with the ultimate goal of achieving the SEC's statutory mission of protecting investors and facilitating capital formation.

I urge my colleagues on both sides of the aisle to support this important bill.

Mr. Chairman, despite the personal attacks happening on the floor here, I am glad to see that we are making real progress. Apparently, we are making an impact here.

With that, I yield 1\1/2\ minutes to the gentleman from New York (Mr. King).

Mr. Chairman, I yield 2 minutes to the gentleman from Arkansas (Mr. Hill), the whip of our Financial Services Committee.

I yield the gentleman an additional 30 seconds.

Mr. Chairman, at this time I yield 3 minutes to the gentleman from Illinois (Mr. Hultgren), the vice chairman of the Capital Markets Subcommittee.

Mr. Chairman, may I inquire as to what is the balance of the time remaining on each side?

Mr. Chairman, I yield 2 minutes to the gentleman from Florida (Mr. Ross).

Mr. Chairman, I yield 1\1/2\ minutes to the gentleman from California (Mr. Royce), the chairman of the House Foreign Affairs Committee.

I yield the gentleman an additional 15 seconds.

Mr. Chairman, may I inquire as to the balance of the time remaining?

Mr. Chairman, at this time, I do not intend to yield to the gentlewoman from New York, even though I struggle to understand how the Export-Import Bank had anything to do with what we are talking about here today.

Mr. Chairman, I yield 2 minutes to the gentleman from Colorado (Mr. Tipton), a member of the Financial Services Committee.

Mr. Chairman, I yield 2 minutes to the gentleman from Georgia (Mr. Loudermilk).

Mr. Chairman, I yield 1\1/2\ minutes to the gentleman from North Carolina (Mr. Budd), a new member of the Financial Services Committee.

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

I would just like to point out to those watching on TV the earlier Democrat-sponsored hot air portion of the bill today.

You heard about the Export-Import Bank. You heard about Bernie Madoff. You heard about the Dodd-Frank Act being the only answer to an economic crisis that was caused by a housing crisis which, by the way, the Dodd-Frank Act did nothing about. By the way, on the Bernie Madoff situation, the SEC ignored a whistleblower for 10 years.

This bill has nothing to do with fraud, and it is not about a trial of the effectiveness or lack thereof of the SEC today. This is about a commonsense notion that we ought to actually identify the target that these rules are trying to hit and then find out if it is the right target and analyze that.

What you see on the other side of the aisle is the philosophy that more is better: the more regulation that the SEC has, the more paperwork, a bigger budget with more employees. We are not sure what their effectiveness is, and we are not sure what exactly they are trying to achieve here, but all we can tell you is that more is better. Damn the costs; it doesn't matter.

That is, obviously, not the intent that we have on this side of the aisle. We are trying to make sure that the

proper protection of the investors is there. We are trying to make sure that the three parts of the SEC's mandate, of which one of those is capital formation and creating a robust atmosphere, are actually happening.

I urge passage of the bill.

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

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

Mr. Chairman, I feel compelled to point out to my colleagues that we are not paid by the word that is put into the Federal Register. I think, once again, you are hearing this example of more is better. It doesn't matter what the words say, just let's have more of them.

We already have the SEC Chairman and the Commissioners covered by both governmentwide ethics laws and regulations as well as SEC supplemental ethics regulations which apply to all SEC employees. For example, they cannot participate personally and substantially in any matter that would have direct or predictable effect on his or her financial interests or imputed financial interests in the future, as required under the code.

Also, unless they are specifically authorized by the SEC's ethics counsel, they should recuse from any matter in which he or she has a ``covered relationship.'' Well, what is a covered relationship? Well, a covered relationship includes former employees, clients, and even a spouse's employer. Further, the SEC employees must report their financial holdings to the SEC's ethics counsel; and this requirement goes beyond, frankly, the governmentwide reporting requirement.

Finally, the SEC Chairman or a Commissioner must not engage in any other business, employment, or vocation while in office; nor may he or she ever use the power of their office to influence their name to promote the business interests of others, as required by law.

As such, I ask my colleagues to join me in opposing this amendment.

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

Mr. Chairman, I will wrap up here by simply saying that the bill before us today is intending to clarify--or have the SEC, I should say, clarify what the goal and objective is of their proposed rule. Let's find out what they are trying to do, and then, more importantly, find out if it is actually effective.

There might be a rule in place already somewhere else. The other side is trying to strike that provision. They are trying to say: No. No. It doesn't matter what the other hand of government is saying. We are going to just add more and more regulation added on.

We need to have a clear understanding of what the objective is, what the target is, and whether it is an effective rule to get to that point. I just would encourage my colleagues to oppose the Waters-Green amendment.

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

Mr. Chairman, I ask unanimous consent to claim the time in opposition to this amendment, though I am not opposed.

Mr. Chairman, I am prepared to accept the amendment and support its immediate passage. I want to thank the sponsor for working with us to draft the language that is consistent with the SEC's tripartite mission to: number one, protect investors; number two, maintain fair, orderly, and efficient markets; and, number three, facilitate capital formation.

I would like to ask my colleagues to join me in supporting the amendment and the underlying bill.

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

Mr. Chairman, I just find it a bit ironic that the other side is not interested in doing this cost-benefit analysis which is in the underlying bill here because it is too burdensome. But what do they want to do? They want to add more paperwork and more burden in their amendments.

Despite what you have heard, the SEC is not a systemic risk regulator; and even the former chairman of the Committee on Financial Services, Barney Frank, noted at the time when the FSOC was reviewing asset managers for systemic designations, he recognized that these are not entities that pose a systemic risk to the financial system. And while the SEC does not regulate systemic risk, I am afraid that this amendment could be potentially politically misinterpreted and applied to a number of capital market participants and activities which they, frankly, have no business regulating. So it would lead to the same fire, aim, ready kind of situation rulemaking that we have seen from the current administration that hinders growth and that capital market formation that we have just talked about in the last amendment.

The bill before us will ensure that future SEC rulemakings are prudently proposed and adopted to achieve the maximum net benefit, and that is what we are really talking about here today. While I support the underlying bill, I will have to oppose this amendment.

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

Will the gentleman yield?

This has nothing to do with Bernie Madoff since the whistleblower approached the SEC and the SEC, using its dollars, was not able to stop him.

I appreciate the gentleman yielding. Working together on the Financial Services Committee, we know that there are actuarial tables and analyze risk all the time. You are able to analyze fraud.

You are able to analyze that risk.

Mr. Chairman, may I inquire as to the remaining balance of the time.

At this point I am ready to close and I reserve the balance of my time.

Mr. Chairman, I would just like to point out to all of my colleagues and to the American people that currently the SEC is under a court order to clarify how exactly they are doing their rulemaking. And there is a staff-level rule letter.

With this underlying bill, we are trying to codify that. We are trying to make sure, not just with a letter, but by law, that they do what they are being ordered to do. And I will remind all of my colleagues and those of you out watching us, the Securities and Exchange Commission has a mission that has three parts.

The first part is to protect investors. Nothing in this bill weakens there. Nothing in this bill takes anything away from that. We, in fact, underscore that.

The second mission that it has is to maintain fair, orderly, and efficient markets. Emphasis again, fair, orderly, and efficient markets. What we are seeing is inefficiency that is being built into the marketplace right now, and we are here to clarify that. Let's find out, as the SEC is preparing a rule, what the goal and objective is and what is going to be the impact on it. Yes, cost is part of that, and we are able to look at that.

The third thing the SEC intended to do is to facilitate capital formation.

Why is that important and what exactly does that mean?

It means making sure that there is enough money around so that companies, big, medium, and small, are able to go in there and get the cash and the credit that they need to go and expand and do the job that they are trying to do, which is, by the way, employ all of us in America.

We have talked a lot about the underlying bill and not so much about the particular amendment that we have before us, but I do continue to oppose the amendment and encourage the passage of the underlying bill.

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

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

I thank the gentleman for the customary 30 minutes.

Mr. Speaker, I rise in opposition to the rule and the underlying bills.

I start by, again, mentioning the fact that we have before us, under this rule, H.R. 238, the Commodity End-User Relief Act, and H.R. 78, the SEC Regulatory Accountability Act. I will talk about them in a minute.

There are 56 Members of this body who are new Members and who had no chance to participate in marking up

these bills in their committees of jurisdiction. Sure, I am back and Mr. Newhouse is back, but 56 people who were in that Congress in December are not here now, and there are 56 new people.

Again, a regular order process would allow these bills to go through committee and have ideas and the participation from Democrats and Republicans, who represent, collectively, tens of millions of people in this country, in improving these bills. We did not allow it. These bills just appeared fait accompli in the Rules Committee yesterday. Here we are on the floor. None of the new Members had a chance in their committees to offer them.

In fact, I am not sure where the Republicans are in their process, but Democrats are still finalizing our committee assignments. We have some of them, and the rest will be completed shortly.

For Congress to work well, we need to have regular order. And for regular order to work, we need to make sure that the 56 new Members who represent tens of millions of people are not disenfranchised in this process.

Now, getting to the bills. H.R. 238, the Commodities End-User Relief Act, has been brought to the floor even before the Agriculture Committee convened or held its organizing meeting. It reauthorizes the Commodities Futures Trading Commission through 2021. It makes a lot of changes to internal changes and modifies a number of provisions that were designed to prevent financial meltdowns.

Additionally, H.R. 238 includes language on issues that the Commodities Futures Trading Commission has already addressed through its own efforts. For example, the Commodities Future Trading Commission has acted on 16 of 22 provisions in titles I and III. Particularly, many of us are concerned by the cross-border language in the bill, which would undercut efforts already underway by the Commission to negotiate an international system of safe and robust derivative rules.

H.R. 238 would actually require the Commodities Futures Trading Commission to create a rule that would automatically allow U.S. banks and foreign banks conducting business in the U.S. to do so under the rules imposed by foreign jurisdictions, which can be substantially different than those of our own, removing the confidence in the marketplace that is needed for a commodity market to work.

Finally, as you know, Congress passed a number of reforms to enable regulators to respond quickly to changing markets. The provisions in title II would weaken the CFTC's ability to respond in a timely and effective manner.

The financial services industry continues to innovate. It is important that regulators keep pace and prevent systemic risks, prevent meltdowns, prevent bailouts. This bill would make it harder to do that.

An example of how the Commission is engaged with and talking about innovation is how to fully embrace emerging technologies like blockchain and decentralized distribution ledgers. They are doing that because many financial firms are focusing on how to incorporate this technology into their business models. Therefore, it is imperative the Commission is given the ability to stay involved and understand the implications of new technology and innovations and is not hamstrung by this overly prescriptive law.

Now, the Commission does need reauthorization, and I would love the opportunity to work with my colleagues on the other side to do so. It should be in a thoughtful, bipartisan manner that gives the agency the ability it needs to effectively look at incredibly complicated financial transactions, make sure that consumers and users of commodities that hedge their risks are not abused in the process. We do not want to hamstring the agency by unnecessary and counterproductive requirements as this bill does.

The other bill, H.R. 78, the SEC Regulatory Accountability Act, also was brought forward before the Financial Services Committee got organized. This bill was not even considered by the House last Congress, and it stalled in the Financial Services Committee. So you actually have a bill that didn't even clear committee last Congress. I was complaining about how the 56 Members that are new to this body didn't have a chance to put their imprint on the first bill. The second bill didn't even make it through the Financial Services Committee and didn't even pass the House floor last session. Yet, here it is without the appropriate committee consideration, depriving new Members representing tens of millions of Americans--Democratic and Republican-- the ability to improve this bill.

Under the guise of regulation changes, H.R. 78 would actually require the SEC to conduct enhanced cost-benefit analysis in order to ensure that benefits of their regulation justify the cost. In effect, the bill directs the SEC to look at things like market liquidity and small businesses, which, of course, it already does as part of its economic analysis. So, again, it is a bill that would bury the SEC in regulatory paperwork.

H.R. 78's cost-benefit analysis is weighted toward helping large financial institutions save money. I support reducing costs for financial institutions. Who wouldn't? But that is not the primary drive of our regulatory structure. We should put consumers and our systemic risks first and foremost and, of course, where we can reduce the unnecessary costs for our financial institutions in the hope that those would be passed along to those they serve.

I, therefore, oppose both of these bills. I oppose the rule that limits the opportunity for Members to offer amendments to these two pieces of legislation. I oppose this process that disenfranchises our new Members.

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

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

When we defeat the previous question, I will offer an amendment to the rule to bring up legislation that would require the President and Vice President of the United States, their spouses and dependent children to disclose and divest any personal financial holdings that could create a conflict of interest by placing them in a blind trust. This has been standard for previous Presidents, and this legislation ensures that that precedent continues.

In today's news conference moments ago, President-elect Trump said that he did not plan to follow with precedent and place his assets in a blind trust and would continue his direct ownership interest in them. President-elect Trump has refused to release his tax returns, refused to resolve conflicts of interest related to his business dealings. The American people expect the President to do what is best for the country and not what is best for his business or his pocket.

Mr. Speaker, I ask unanimous consent to insert the text of the amendment in the Record, along with extraneous material, immediately prior to the vote on the previous question.

Mr. Speaker, to discuss our proposal, I yield 5 minutes to the distinguished gentlewoman from Massachusetts (Ms. Clark), the lead sponsor of the bill that I am proud to cosponsor.

Mr. Speaker, I am prepared to close, and I yield myself the balance of my time.

I just want to emphasize how important it is that we defeat the previous question. There are so many questions that have been raised. Not only is it in keeping with longstanding precedent for the President to divest and place their assets in a blind trust, but it is more important than ever with this President who has a complex web of assets, nationally and internationally, which are rife with conflicts of interest for the incoming administration.

I truly hope we can act in a bipartisan way to defeat the previous question and bring forward Ms. Clark's simple, straightforward bill. It affects future Presidents, Republican and Democratic, and it is a very simple, commonsense piece of legislation simply saying that they will divest and place their assets in a blind trust, something that is important for both the appearance of propriety as well as for the sake of propriety.

And yet instead of focusing on legislation to investigate foreign powers undermining our recent election, instead of focusing on preventing conflicts of interest for the incoming administration, instead of focusing on legislation that would create jobs, reduce our deficit, or improve on health care, instead we have partisan legislation that hasn't gone through regular order. It has left 56 new Members representing tens of millions of Americans on the sideline.

The House passed a lot of legislation last Congress. That does not mean that we should bring every bill directly to the floor and skip the committee process, because there are 56 new Members who should also have a chance to put their imprint on legislation. The way the majority is bringing bills to the floor, it ignores the concerns of the American public; it ignores pressing issues related to the incoming President.

We have this window of time under the outgoing President to send a bill to his desk to require disclosure and divestment from the new President, but that window is rapidly closing. We will only have President Obama in the White House for another week, so time is running short.

If we act now and defeat the previous question, hopefully the Senate will act within a few days, and we can get the bill to President Obama. But the timeline is very, very short to do this. I do not expect that Mr. Trump would sign a bill that puts additional requirements on himself, although he would perhaps change that bill to affect future Presidents because it needs to be done. It is kind of shocking that we relied on precedents rather than law in this area.

I urge my colleagues to vote ``no'' and defeat the previous question so I can bring forward Ms. Clark's bill as my amendment. I urge my colleagues to vote ``no'' on the rule, and I urge my colleagues to vote ``no'' on the underlying bill.

I yield back the balance of my time.

Mr. Speaker, on that I demand the yeas and nays.

Mr. Speaker, I demand a recorded vote.