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.…
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.