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.
CFTC Overreach Impacts End-Users & Leads to Higher Costs for Consumers
Tamara Hinton, 202.225.0184
WASHINGTON – Today, Rep. K. Michael Conaway, Chairman of the House Agriculture Subcommittee on General Farm Commodities and Risk Management, held a hearing to examine the impact of the Commodity Futures Trading Commission's (CFTC) actions on end-users. These are businesses that provide our daily goods and services, and rely upon derivatives contracts to manage the risks associated with their operations. Since the passage of the Dodd-Frank Act, end-users have shared consistent concerns that the CFTC is overreaching in its rulemaking and cautioned it would ultimately lead to higher costs for consumers.
"Well-functioning markets are essential to help grow the economy, and one needs to look no further than our witnesses here today to understand how important it is for the CFTC to get its regulations right. The past two years have been a regulatory roller coaster for end-users. I am concerned about the impact that delays and last minute no-action letters are having on how market participants manage their businesses. The lack of certainty has no doubt cost many companies valuable capital and changed their strategic thinking. Regulations should be created and exist to protect markets, not destroy them," said Chairman K. Michael Conaway (R-TX).
"Today’s hearing was especially important as it reminds us why our financial markets exist in the first place, which is to serve companies both large and small, as well as individuals like farmers and their co-ops, in managing their business risks. The insight of the end-users represented today will prove essential moving forward as we seek to ensure the implementation of Dodd-Frank proceeds properly at the CFTC, so as not to throw up regulatory roadblocks to the legitimate hedging activities of American companies," said Ranking Member David Scott (D-GA).
This is the third in a series of hearings on the future of the CFTC. The first one was a full committee hearing on May 21 to gain perspectives from the market. Yesterday, the subcommittee heard from the CFTC directly.
Written testimony provided by the witnesses is linked below.
Mr. Scott Cordes, President, CHS Hedging, Inc., St. Paul, Minnesota, on behalf of the National Council of Farmer Cooperatives
Mr. Lance Kotschwar, Senior Compliance Attorney, The Gavilon Group, LLC, Omaha, Nebraska, on behalf of the Commodity Markets Council
Mr. Richard F. McMahon, Jr., Vice President, Edison Electric Institute, Washington, DC
Mr. Chris Monroe, Treasurer, Southwest Airlines, Dallas, Texas
Mr. Andrew K. Soto, Senior Managing Counsel, Regulatory Affairs, American Gas Association, Washington, DC
Mr. Gene A. Guilford, National & Regional Policy Counsel, Connecticut Energy Marketers Association, Cromwell, Connecticut, on behalf of the Commodity Markets Oversight Coalition