June 20 (Bloomberg) -- The U.S. Commodity Futures Trading Commission should propose a rule on the international reach of Dodd-Frank Act swaps regulations instead of relying on informal guidance that lacks an analysis of its cost on the financial industry, two U.S. House Republican representatives said.
“We respectfully request that you do not move forward with the non-binding ‘guidance’ and instead proceed through a formal rule-making process and conduct the appropriate cost-benefit analysis that the law requires,” Representatives Scott Garrett of New Jersey and Randy Neugebauer of Texas said in a letter today to CFTC Chairman Gary Gensler. The CFTC has scheduled a meeting tomorrow to propose the guidance.
The guidance would extend Dodd-Frank oversight to overseas branches, subsidiaries and conduits of U.S. banks including JPMorgan Chase & Co. and Goldman Sachs Group Inc.
“I think if we were to leave the London branches of the U.S. banks or even the guaranteed affiliates out it would be, so to speak, another loophole and a retreat from reform where risk would come crashing back to our taxpayers and our Federal Reserve,” Gensler said yesterday at a hearing held by the House Financial Services Committee, of which Neugebauer and Garrett are both members.
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