AFR sent a letter to the House voicing our strong opposition to HR 2586, the “Swaps Execution Facility Clarification Act”. HR 2586 would undermine a key element of derivatives reform – the attempt to create transparent, competitive markets for previously ‘dark’ over-the-counter (OTC) derivatives.
“In a March 27 letter to members of the committee, Americans for Financial Reform writes that the swaps bill, introduced last October by Rep. Scott Garrett, R-N.J., chairman of the House Financial Services Subcomittee on Capital Markets, ‘would undermine’ the regulatory regime for derivatives laid out by Congress in the Dodd-Frank act ‘by exempting any derivatives transaction between a U.S. swap dealer and a non-U.S. entity from all the major protections contained in Title VII of the Dodd-Frank Act,’ with the one exception being reporting requirements to regulators.”
“Also on Tuesday the Financial Services Committee approved a bill to limit the international reach of new U.S. swaps and derivative rules. …The group Americans for Financial Reform, a strong backer of Dodd-Frank, warned the bill would allow U.S. banks to evade oversight. ‘In addition to seriously undermining the basic transparency and accountability requirements in the U.S., such a ‘race to the bottom’ would be a serious blow to the entire international effort to make derivatives markets safer,’ the group said in a statement.”
AFR and CFA sent a join letter to the House urging members to vote NO on the final passage of the JOBS Act.
AFR sent a letter to the House this morning urging members to oppose HR 3283. HR 3283 would allow U.S. banks to evade Dodd-Frank derivatives regulation by dealing through their foreign subsidiaries. This could fatally undermine derivatives oversight.
“H.R. 3283 would let U.S. banks trade derivatives, such as credit default swaps, overseas without having to build up any extra capital to protect against a meltdown in those derivatives. ‘This would create an overwhelming temptation to move swaps business overseas, indeed to the foreign jurisdictions where regulation was most lax compared to the U.S.,’ Americans For Financial Reform, a coalition of labor, consumer and other groups, wrote in a letter to the House today.”
“Consumer advocates said the two bills could lead to abuses. For example, the bill addressing transactions between related companies refers to swaps between ‘affiliates.’ Marcus Stanley, policy director for Americans for Financial Reform, said he worried that corporate lawyers would try broadening the use of that term to include more and more companies. ‘It’s ridiculous to put this broad exemption into statute,’ Stanley said.”
AFR sent a letter to the House, urging opposition to HR 2779 and HR 2682, two harmful derivatives bills which are inaccurately being presented as ‘technical amendments’ necessary to correct minor issues in the Dodd-Frank Act.
“We are deeply disappointed by the Senate passage of the so called “JOBS Act.” With the country still suffering from hard times and high unemployment in the wake of the financial crisis, it is almost unbelievable that the Senate would rush passage of measures that will undermine transparency and accountability in the capital markets, and expose our families to a new round of fraud and abuse. But that is what they have done.”
U.S. PIRG sent a letter to the Senate this morning, echoing AFR’s letter supporting both the Reed and the Merkley-Bennet-Brown Amendments and urging members to vote NO on the JOBS Act.