Commodity End-User Relief Act

Floor Speech

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Mr. AUSTIN SCOTT of Georgia. Mr. Chair, I rise today in support of H.R. 2289, the Commodity End-User Relief Act.

I firmly believe this legislation represents the kind of thoughtful and bipartisan approach to policy-making that is often lacking in Washington.

It represents simple good governance by reauthorizing the Commodity Futures Trading Commission, which has been operating without authorization since 2013.

The bill includes needed reforms to clarify Congressional intent, minimize regulatory burdens, and most importantly, preserve the ability of necessary risk management markets to serve those who need them.

The Agriculture Committee, specifically the Subcommittee on Commodity Exchanges, Energy, and Credit of which I serve as Chairman, heard diverse perspectives from end-users, market participants, and regulators through many hours of testimony on this reauthorization earlier this year.

That testimony, coupled with testimony from numerous other hearings at the subcommittee and full committee level over the course of the last two Congresses, was instrumental in drafting the legislation before us today.

Time and again, we have heard how end-users, who were not the cause of the financial crisis, have been the collateral damage of Dodd-Frank's reforms. These end-users are our farmers, ranchers, manufacturers, and electric and gas utilities, and they rely on the derivatives markets to manage their risk, and, thereby keep consumer costs low.

The cost of unnecessary regulatory burdens on these end-users, and the uncertainty these regulations cause, will ultimately be borne by American citizens in my district and in districts around the country. Therefore, it is essential that we provide them with much-needed relief and clarity.

This legislation includes several such end-user relief provisions. It requires the Commission to vote to change the current threshold for the swap dealer de minimis exception, rather than the automatic and arbitrary reduction slated to occur in December 2017.

It also preserves end users' ability to hedge against anticipated business risks under the definition of a bona fide hedge transaction, provides common sense record-keeping relief for grain elevators, farmers, and other commercial market participants, and clarifies the exclusion of contracts with volumetric optionality from the definition of a swap.

Additionally, this legislation codifies several new regulatory customer protections, borne out of lessons learned from the Peregrine Financial and MF Global failures.

Finally, it makes important reforms to the Commodity Futures Trading Commission, including the creation of a new Office of the Chief Economist and a more stringent requirement for cost benefit analysis of proposed rules.

With this legislation, we have the opportunity to ease the regulatory burden on those who use the derivatives markets, not to speculate, but to hedge risk. Ultimately, this bill is about protecting the American producer and the American consumer.

I want to close by thanking Chairman Conaway for his strong leadership on the House Committee on Agriculture. His thoughtful and bipartisan approach to policy-making is reflected in the legislation before us today.

Additionally, I want to thank the Ranking Member on the Commodity Exchanges, Energy, and Credit Subcommittee and my colleague from Georgia, Mr. David Scott, who has been a steady partner throughout this effort.

We have worked diligently to produce legislation that provides needed reforms to ensure our regulatory framework protects the integrity of our markets while not limiting the ability of end users to access these tools to conduct their business.

I am proud to support H.R. 2289, the Commodity End-User Relief Act, and urge my colleagues to join me in voting for this legislation.

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