“We respectfully request that you do not move forward with the non-binding ‘guidance’ and instead proceed through a formal rule-making process and conduct the appropriate cost-benefit analysis that the law requires,” Reps. Scott Garrett (R-N.J.) and Randy Neugebauer (R-Texas) said in a Wednesday letter to the CFTC, which plans to propose guidance on Thursday, Bloomberg reports.
The proposed guidance would extend the reach of the 2010 Dodd-Frank Act to include overseas U.S. subsidiaries and affiliates.
“I think if we were to leave the London branches of the U.S. banks or even the guaranteed affiliates out of it would be, so to speak, another loophole and a retreat from reform where risk would come crashing back to our taxpayers and our Federal Reserve,” CFTC Chairman Gary Gensler said, according to Bloomberg.
Under the proposed guidance, overseas subsidiaries and affiliates of U.S. firms would be subject to comply with Dodd-Frank rules within a similar time frame as foreign competitors. The new timetable under consideration would forego earlier plans to allow overseas affiliates extra time to come into compliance with the financial reform law.