Swaps Regulatory Improvement Act

Floor Speech

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Mr. HUDSON. Mr. Speaker, given the bicameral and bipartisan support for our bill and the overwhelming consensus about the systemic risk created by the section we are working to reform today, I am genuinely surprised we are even here debating this today.

Nevertheless, I rise to speak in support of H.R. 992, the Swaps Regulatory Improvement Act, which my Democrat friend from New York, Sean Patrick Maloney, and I have worked together on in the House Agriculture Committee.

As my colleagues are aware, our bipartisan bill amends a provision in the Dodd-Frank Act which was included at the 11th hour to ``get 60 votes in the Senate'' as former House Financial Services Chairman Barney Frank indicated during a markup of the bill back in February, 2012.

This section we reform with our bill was mischaracterized as an effort to prevent ``risky'' swaps activities in the bank. While we believe this provision was proposed in good faith, it simply does not prevent the risk that its authors intended. Moreover, this provision of the bill will cause many American financial institutions to operate at a significant disadvantage to their foreign competitors.

Federal Reserve Chairman Ben Bernanke and former Federal Reserve Chairman Paul Volcker have both publicly raised concerns about section 716.

In the 112th Congress, the House Financial Services Democrats, including Chairman Frank and current Ranking Member Maxine Waters, endorsed H.R. 1838, agreeing that this measure addressed the valid criticisms of section 716 without ``weakening the financial reforms law's important derivative safeguards or prohibitions on bank proprietary trading.''

The bill before us today is virtually identical to H.R. 1838 from the last Congress.

Mr. Speaker, to echo what Federal Reserve Chairman Ben Bernanke said at a hearing on February 27:

Section 716, as drafted, will not reduce risk and will likely increase costs of people who use the derivatives and make it more difficult for the bank to compete with foreign competitors who can provide a more complete set of services.

It is crystal clear: this section needs to be reformed.

I ask my colleagues to support this bill and look forward to my Senate colleague, Kay Hagan, passing her companion bill in the Senate so we can get this commonsense reform completed.

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