In The American Banker (5/3/13), reporter Victoria Finkle looks at the derivatives bills marked up by the House Agriculture and Financial Services committees and moving toward a vote on the House floor.

“[L]iberal groups and some Democrats… have pushed back… warning that the package of legislation rolls back important regulatory provisions for the swaps market and effectively guts the financial reform law,” Finkle writes.

She quotes AFR’s Marcus Stanley on the Swaps Regulatory Improvement Act (H.R. 992). “When these swaps are done out of a depository institution, it’s effectively getting a public subsidy from deposit insurance,” Stanley said.

The article also discusses the Inter-Affiliate Swap Clarification Act (H.R. 677). “It is unnecessary and counterproductive to impose these requirements on affiliate swap transactions, because an inter-affiliate trade doesn’t have the same risk and it doesn’t have the same systemic issue,” Cecelia Calaby, a senior vice president of the American Bankers Association, told Finkle. “It’s simply a way for the banking enterprise to manage interest rate or foreign exchange risk centrally. The transactions put risk in the right place.”

But, as the article goes on to note, the Commodity Futures Trading Commission has already issued a rule that distinguishes between affiliate and other trades, “calling into question the need for the legislation.”

“The bill goes a lot further because it writes inter-affiliate swaps out of the definition, so the CFTC” doesn’t have jurisdiction, Marcus Stanley told Finkle. “It also describes inter-affiliate extremely loosely – the affiliates don’t even need to share majority ownership. That’s a big, whopping exemption.”