Source: U.S. HOUSE COMMITTEE ON AGRICULTURE, 10/12/11

Opening Statement of Chairman Frank D. Lucas, Committee on Agriculture

Public hearing to review legislative proposals amending Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act

As prepared for delivery
Thank you for joining us today, and to our witnesses, each of whom travelled to appear before our Committee.

I’d also like to thank the many Members of this Committee—on both sides of the aisle— who have worked so hard in preparing legislation for us to consider today.

This is the seventh hearing we’ve had regarding Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act.  We’ve heard from over 30 market participants, from a wide range of organizations.  

In the course of those seven hearings, we’ve gathered a good deal of information on how the implementation of the Dodd-Frank Act is affecting businesses across the country.  

We’ve heard that some regulations will impose significant costs that aren’t being accounted for by the CFTC. We’ve heard that Congressional intent on many proposals, including margin requirements on end-users, may be superseded. We’ve heard confusion about the order of regulations being proposed and concern about the scope of regulatory definitions. And most importantly, we’ve heard from businesses that are concerned that some Dodd-Frank regulations will actually inhibit their ability to manage risk. That runs counter to the purpose of Dodd-Frank, which was to increase stability and transparency in our financial markets.  

So today, we will consider seven legislative proposals aimed at fixing some important areas in implementation where the regulators—the CFTC in particular—simply haven’t gotten it right. None of these bills propose dramatic changes to Dodd-Frank. They are aimed at ensuring that the regulators don’t implement rules that conflict with, or are contrary to, what Congress intended.  

They do not undermine reform, and they are not efforts to repeal Dodd-Frank.  They are intended to restore the balance that I believe can exist between sound regulation and a healthy economy.   Some may say that looking at legislative remedies is premature—that we ought to wait until the rules are finalized and let the regulators improve upon the proposed rules.

It is my sincere hope the rules improve.  It is my hope that the agencies will listen to the comments that have been filed, and to the feedback they’ve gotten from market participants and from Congress. But with unemployment stuck at 9 percent, I’m not willing to just stand by and keep my fingers crossed that the flaws in the proposed rules will be fixed.  

We are facing widespread and potentially severe unintended consequences from these regulations that will have a direct effect on our economic recovery.  When the rules are final, they’re final.  And businesses across the country, including our farmers and ranchers, need to prepare for the new regulations and related costs now.  They will not be able to wait for Congress to act.

I’d also note that we will consider three discussion drafts today.  I welcome and encourage feedback from our witnesses and the Members on this Committee about ways in which we can and should improve upon these proposals.   

They are aimed at making sure that an overly broad swap dealer definition doesn’t encumber our energy and agriculture sectors, that our pensions and government entities do not face prohibitive burdens when accessing swaps markets, and that small financial institutions and farm credit banks can continue to pair credit with risk mitigating tools.

All of these proposals aim to keep capital in the hands of the businesses we need to lead our economic recovery.  

Thank you again for being here today, and I look forward to hearing from our witnesses.