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 CFTC works to finish rules for trading by banks including JPMorgan Chase & Co. 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. Sharon Y. Bowen, a securities lawyer at Latham & Watkins LLP in New York, is being considered as a possible replacement for Chilton, according to four people with knowledge of the White House deliberations.
In their letter, the senators pushed for Obama to select someone who will oppose efforts to weaken the overseas reach of Dodd-Frank rules, delay the Volcker rule ban on proprietary trading, and loosen limits on the positions traders can have in oil, natural gas and other commodities.
Separately, a coalition of lobbying groups representing airlines, farmers and energy users, called on Obama to replace Chilton with someone who has experience in commodity markets.
“It is worth noting that upon his departure, the CFTC will be absent a commissioner with a recent background in commodity derivatives and the underlying physical markets,” the Commodity Markets Oversight Coalition said in a letter dated yesterday.
Amy Brundage, a White House spokeswoman, said today that the Obama administration didn’t have any announcements on personnel. The Senate Agriculture Committee, which oversees the CFTC, doesn’t plan to act on confirmations until next year, according to Senator Debbie Stabenow, the Michigan Democrat who leads the panel.
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. They said they were eager for the Senate to question Massad because little is known about his views on derivatives regulation.
In addition to Feinstein, Levin and Warren, the Senate letter was 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