The House Financial Services Committee passed a number of bills last week designed to address Dodd-Frank’s derivatives provision, implement the JOBS Act and promote enhanced accountability at the SEC.
Many critics maintain that Dodd-Frank’s derivatives provision could have unintended consequences. Derivatives allow many businesses—known as end-users—to manage their risk and hedge against fluctuating prices and interest rates.
The committee passed H.R. 634, introduced by Reps. Michael Grimm (R-N.Y.), Gary Peters (D-Mich.) and Austin Scott (R-Ga.), which would exempt end-users from margin and capital requirements under Title VII of Dodd-Frank. Though Congress has said the legislation does not grant regulators the authority to impose end-user margin requirements, some regulators have imposed the requirements on some end-users because they are counterparties to swaps with a regulated entity.
The committee also passed H.R. 701 and 801, which would require the SEC to finalize rules to implement Title IV of the JOBS Act by Oct. 31 and amend Title IV of the JOBS Act to extend the registration and deregistration thresholds to savings and loan holding companies, respectively.
Additionally, the HFSC passed H.R. 1062, which would require the SEC to conduct thorough cost-benefit analyses of rules to ensure that the benefits of the legislation outweigh the costs. The SEC would be required to adhere to President Obama’s executive order requiring government agencies to craft regulations that are accessible, consistent, written in plain language and easy to understand. The adoption of the bill codifies the executive order, requiring the SEC to comply rather than leaving the compliance decision up to the SEC chairman.