The U.S. House of Representatives passed legislation to curb the power of the nation’s top derivatives regulator, advancing the measure over Democrats’ objections and in the face of a veto threat from President Barack Obama.
The Republican-led House on Tuesday voted 246-171, mostly along party-lines, for a bill that would renew the responsibilities of the Commodity Futures Trading Commission while limiting its ability to regulate Wall Street banks’ overseas trades. It also would force the CFTC to do more cost-analysis of its rules, a key requirement that could stall the agency’s work.
The vote sends the legislation to the U.S. Senate, where majority Republicans will need at least six additional votes to pass the measure. Changes will be necessary to get Democrats’ support after the Treasury Department and the CFTC said the bill would undermine the agency’s ability to police trading. The CFTC oversees transactions involving Goldman Sachs Group Inc., JPMorgan Chase & Co. and other firms.
Obama would veto the legislation as drafted, the White House said this month.
House Agriculture Committee Chairman K. Michael Conaway, the Texas Republican whose panel oversees the CFTC, struggled to win Democratic support for his bill, which is backed by groups representing banks, and agricultural and energy traders.
After the vote, Conaway defended the legislation in a statement, saying it would have “a positive impact on virtually every portion of our nation’s economy.”
Senate Agriculture Committee Chairman Pat Roberts, a Kansas Republican, has begun work on a similar bill to ease rules for agricultural, energy and other commercial traders who use derivatives to hedge risk.
“There’s an awful lotta people that are involved in risk management that got hit by Dodd-Frank,” Roberts said in a May interview with Bloomberg News. “We’d like to relieve them of some of those burdens.”