The ABA and the ABASA, its subsidiary, sent a letter to the Senate on Monday requesting support on an appropriations amendment offered by Sen. Mike Crapo (R-Idaho) that corrects fundamental deficiencies during derivatives rulemaking required by Dodd-Frank.
The amendment, according to ABA.com, would require the Commodity Futures Trading Commission, the Securities and Exchange Commission and banking regulators to develop an implementation schedule through notice and comment rulemaking. It would also require them to report on the effects of Dodd-Frank’s new derivatives regime, including the effects on economic growth, market liquidity and international competitiveness.
“ABA members support the objectives of increasing transparency and reducing systemic risk in the derivatives markets,” the letter said, ABA.com reports. “However, it is critically important that any new regulatory regime intended to do so is implemented in a way that does not disrupt the credit markets, create competitive inequities, or unnecessarily burden market participants that do not pose systemic risk.”
Crapo’s amendment, the letter said, addresses concern about the potential competitive inequities that may result from hasty rulemaking.
The ABA also supports the amendment requiring bank regulators to consider the impact of lack of harmonization during derivatives rulemaking between U.S. domestic regulators and their international counterparts.
“In addition, our global member banks are concerned that insufficient attention has been paid to the competitive inequities that could result if the United States proceeds with rulemaking well ahead of international counterparts,” the letter said, according to ABA.com. “We support the sensible approach to rulemaking laid out in Senator Crapo’s amendment.”