Prominent House Republicans called on Treasury Secretary Timothy Geithner last week to clarify Dodd-Frank regulations set to go into effect this week.
House Agriculture Committee Chairman Frank Lucas (R-Okla.), Spencer Bachus (R-Ala.), Mike Conaway (R-Texas) and Scott Garrett (R-N.J.,) said in a letter that “widespread confusion and uncertainty exists among market participants regarding the implementation of these new rules, especially with respect to exactly how the Commodity Futures Trading Commission plans to impose and enforce these new rules.”
The group added that end users have expressed concern that the CFTC had failed to respond to petitions seeking exemptions from compliance with the rules, which will go into effect on Oct. 12.
End users have requested that the CFTC promise not to launch enforcement actions if their systems are not prepared for the new rules by the Friday deadline.
The congressmen joined the end users in calling on the CFTC to intervene and “provide clarity and certainty for U.S. market participants.”
The lack of clarity, the group warns, could have dire results.
“The lack of regulatory clarity will force many institutions to leave the marketplace as a result of legal uncertainty,” their letters warns. “This result will, in turn, increase the costs of borrowing for some customers, or eliminate certain types of contracts used for hedging. If either occurs, businesses will be left exposed to market volatility and the consequences will ultimately be felt by Americans in the form of increased consumers costs.”"