On May 24, the House Financial Services Committee amended and subsequently passed legislation that would delay implementation of a major portion of the Dodd-Frank Wall Street Reform and Consumer Protection Act, until Sept. ’12.
H.R. 1573, sponsored by Financial Services Committee Chairman Bachus (R-AL), Agriculture Committee Chairman Lucas (R-OK) and others, would maintain the current July 21, ’11 deadlines for the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) to finalize rules on the definitions of swaps-related products and participants and rules on reporting and recordkeeping. An amendment approved by the Committee during the May 24 mark-up added clearing rules to that list.
The bill, which was previously approved by the House Agriculture Committee on a party-line vote, originally had an extended deadline of Dec. 31, ’12, for Dodd-Frank swaps rulemaking. The Financial Services Committee, on a voice vote, agreed to move up the extension date to Sept. 30, ’12 as the deadline for all other swaps rulemaking under Title VII of Dodd-Frank.
The legislation, as amended, passed the Committee 30-24 along party lines. It now will be taken up by the entire House. Democrats, led by ranking member Rep. Frank (D-MA), argued that the legislation was an effort to delay implementation of Dodd-Frank. Frank focused his arguments in opposition to the bill on the fact that it would stop the CFTC from acting on position limits. His argument was addressed by adoption of an amendment offered by Rep. Lynch (D-MA) which would allow the CFTC and SEC to act on speculative position limits before the Sept. ’12 deadline. Because Republicans hold an overwhelming majority in the House, the legislation should pass, but the outlook for approval by the Democrat-controlled Senate is highly questionable.