The Commodity Futures Trading Commission must “slow down” and ask Congress to delay July deadlines for new derivatives regulations required under the Dodd-Frank Act, U.S. Representative Frank D. Lucas said today in a Bloomberg News interview.
“The first step is: Will the chairman at some point acknowledge he needs the extra time and ask us?” said Lucas, the Oklahoma Republican who leads the House Agriculture Committee, referring to CFTC chairman Gary Gensler. “If we’re unable to help the chairman, at some point a legislative response will be the key.”
The CFTC and the Securities and Exchange Commission are writing regulations for the $583 trillion over-the-counter derivatives market after largely unregulated trades exacerbated the financial crisis in 2008. Republicans including Lucas have urged the regulators to take more time writing and implementing rules to avoid unnecessary costs and unintended consequences.
“I don’t think Congress needs to push back the date,” Gensler told the Agriculture Committee at a hearing today. “You’ve already given us great latitude to phase the implementation dates.”
The CFTC will complete some rules after Dodd-Frank’s July deadline, Gensler said at the hearing.
‘Gut the Law’
Republican calls to slow the pace of rule-writing aren’t aimed at undermining the regulatory overhaul passed by a Democrat-led Congress, Lucas said in the Bloomberg News interview before the hearing.
“You’re not going to gut the law because it’s not going to happen legislatively,” he said.
The CFTC’s $169 million budget for the current fiscal year has been caught in a congressional stalemate between Republicans seeking to rein in spending and Democrats looking to fund new oversight. Under President Barack Obama’s fiscal 2012 budget, presented Feb. 14, the agency’s budget would increase to $308 million.
“I believe the chairman is moving too aggressively,” Lucas said. “I believe the process needs to be slowed down and become more methodical. If providing him with dramatic new amounts of resources to hire more staff simply accelerates his ability to produce rules and regulations, that’s not answering the issue I have.”
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