President Barack Obama must name a Commodity Futures Trading Commission member with the experience needed to ward off Wall Street lobbying over the Volcker rule and speculation limits, nine Democratic senators said.
The nominee needs demonstrated expertise in derivatives markets -- including futures, options and swaps -- to ensure the Dodd-Frank Act rules are completed “even in the face of extremely stiff industry lobbying,” Senators Dianne Feinstein of California, Carl Levin of Michigan and Elizabeth Warren of Massachusetts said in the letter signed by six other colleagues.
Obama will have to replace CFTC Commissioner Bart Chilton, a Democrat who has said he plans to step down, after naming the Treasury Department’s Timothy Massad to succeed Chairman Gary Gensler, whose term is expiring. The changes come at a crucial moment as the five-member commission works to finish rules for swap trading by banks including JPMorgan Chase & Co. (JPM) and Goldman Sachs Group Inc.
“We are deeply concerned that some industry interests may view the Gensler and Chilton departures as opportunities to roll back or slow down essential reforms,” the lawmakers said in the letter to Obama dated yesterday.
The CFTC, which is designed to have five members, could have only one Democrat and one Republican early next year as the Senate weighs nominees to replace Chilton and Gensler, who was a Goldman Sachs partner before entering government work. The White House may nominate Sharon Y. Bowen, a securities lawyer at Latham & Watkins LLP in New York, to replace Chilton, according to four people with knowledge of the deliberations.
The agency needs a commissioner who will oppose likely efforts to weaken the overseas reach of Dodd-Frank rules, delay the Volcker rule ban on banks’ proprietary trading and loosen limits on how big a position traders can have in oil, natural gas and other commodities, the senators wrote in the letter that was also signed by Democrats Jeff Merkley of Oregon, Ron Wyden of Oregon, Maria Cantwell of Washington, Bill Nelson of Florida, Edward Markey of Massachusetts and Barbara Boxer of California.
Americans for Financial Reform and Better Markets, groups that advocate tighter regulation of Wall Street, have issued statements calling on Massad to demonstrate a commitment to be tough on banks.
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