Chairman Frank Lucas today released the following statement on Scott O'Malia's last day as Commissioner of the Commodity Futures Trading Commission (CFTC). Last month, O’Malia announced he would resign to pursue other opportunities.
In Case You Missed It: Lucas Emphasizes Importance of Giving Job Creators Access to Credit
Tamara Hinton, 202.225.0184
WASHINGTON – Chairman Frank Lucas spoke on the floor of the U.S. House of Representatives in support of H.R. 3336, the Small Business Credit Availability Act. The legislation will ensure that community banks can continue to responsibly manage risk and provide credit to America's small businesses. It is one of six bills considered by the Agriculture Committee to bring balance to the Dodd-Frank rulemaking process. The legislation passed by a vote of 312 to 111.
The text of Rep. Lucas's floor speech, as prepared for delivery, follows:
Mr. Speaker, I rise to voice my support for this bill. First and foremost, I'd like to thank my Committee's Ranking Member, Mr. Peterson, and his staff for their diligent work on this bill on behalf of end-users and small business lenders. We have a long-standing tradition of bipartisanship at the Agriculture Committee and their work was invaluable.
I'd like to thank Representative Hartzler for her leadership on H.R. 3336 on behalf of small financial institutions and the businesses they serve.
I would also like to acknowledge and thank Representative Hultgren and Representative Boren whose legislation, H.R. 3527, will not be considered today. As a result of their leadership and Mr. Peterson's support, many of the critical issues for end-users addressed in H.R. 3527 were resolved by the CFTC in its final "definitions rule."
I think we can reasonably feel reassured that agricultural cooperatives and other end-users out in the countryside won't be unnecessarily deemed "swap dealers" and regulated like the largest financial institutions.
As I said from the outset, if the CFTC, on its own, resolves concerns we have raised for months in our Committee room, we would not proceed with legislation. And that is what we've done with H.R. 3527.
However, concerns with the implementation of Title VII remain, and so we are here today to proceed with H.R. 3336. This bill addresses issues that are important to community and farm credit banks—organizations which are instrumental to the economic vibrancy of our towns and rural communities.
In the Dodd-Frank Act, Congress was careful to ensure that new regulations wouldn't impose unnecessary costs on small institutions that might deter them from extending credit to businesses across America.
Small banks pose very little risk to our financial system. Within the banking system, 96 percent of the notional value of derivatives is held by the five largest banks. The very small remaining percentage of the derivatives exposure in our financial system is spread across hundreds of small institutions.
That's why Congress never intended for these community lenders to be regulated the same as the largest global financial institutions.
This bill aims to restore Congressional intent by exempting small banks, credit unions, non-profit cooperative lenders and farm credit institutions from costly clearing requirements under Dodd-Frank. It also ensures that banks can provide can continue to provide risk management tools to their borrowers.
In addition, thanks to the leadership of Representatives Schilling, Owens and McIntyre, provisions in H.R. 3336 will ensure "captive finance affiliates" of manufacturing companies like John Deere and Caterpillar are eligible for the same exemptions as their parent companies and other end-users.
These affiliates are an important source of credit to consumers and businesses, and promote our manufacturing sector.
Lastly, through the hard work of Representatives Costa, Cardoza and Baca, H.R. 3336 clarifies that utilities will not be miscast as "swap dealers" because they enter into contracts that are required by state law. The legislation clarifies that complying with state laws alone won't also draw new and costly federal regulations.
There are many Members on both sides of the aisle at the Ag Committee who have spent time getting this bill to where it is today. We have been careful not to create loopholes or stray from Congressional intent. The bill does not open the door for large financial players to evade regulation or engage in speculative or highly risky activities.
Mr. Speaker, in this economy, it all comes back to jobs. To create new jobs, businesses need access to credit to make new investments. This bill ensures that businesses maintain access to credit from community lenders.
So I urge my colleagues to support H.R. 3336, and ensure America's small businesses can continue to access the credit they need to build our economy.
I yield back the balance of my time.