I 

112TH CONGRESS 

2D SESSION H. R. 5649 

To amend the Commodity Exchange Act to clarify the exemptions for captive 

finance companies from the definition of major swap participant and 

from the swap clearing requirement. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 8, 2012 

Mr. SCHILLING (for himself, Mr. OWENS, and Mr. MCINTYRE) introduced the 

following bill; which was referred to the Committee on Agriculture 

A BILL 

To amend the Commodity Exchange Act to clarify the exemptions for captive finance companies from the definition of major swap participant and from the swap clearing requirement. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Manufacturing Cer5 tainty and Captive Finance Affiliate Clarification Act’’. 


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1 SEC. 2. CLARIFICATION OF THE EXEMPTIONS FOR CAPTIVE 

2 FINANCE COMPANIES FROM THE DEFINITION 

3 OF MAJOR SWAP PARTICIPANT AND FROM 

4 THE SWAP CLEARING REQUIREMENT. 

5 (a) EXCLUSION FROM DEFINITION OF MAJOR SWAP

6 PARTICIPANT.—Section 1a(33)(D) of the Commodity Ex7 change Act (7 U.S.C. 1a(33)(D)) is amended to read as 

8 follows: 

9 ‘‘(D) EXCLUSION OF CERTAIN CAPTIVE FI10 NANCE ENTITIES.— 

11 ‘‘(i) IN GENERAL.—The definition 

12 under this paragraph shall not include an 

13 entity whose primary business is providing 

14 financing that facilitates the sale or lease 

15 of products by or on behalf of the parent 

16 company or another subsidiary of the par17 ent company, and uses derivatives only for 

18 the purpose of hedging underlying com19 mercial risks in a consolidated financing 

20 and leasing portfolio, at least 90 percent of 

21 which, as of the end of its preceding fiscal 

22 year, is qualifying financing (including 

23 loans, notes, installment sales contracts, 

24 receivables, and operating and financing 

25 leases). 


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1 ‘‘(ii) DEFINITIONS.—In this subpara2 graph: 

3 ‘‘(I) QUALIFYING FINANCING.— 

4 The term ‘qualifying financing’ 

5 means— 

6 ‘‘(aa) any financing or lease 

7 of, or that includes, a product; or 

8 ‘‘(bb) any financing to or for 

9 the benefit of an affiliate of the 

10 entity, a distribution entity, or 

11 any customer or affiliate of a dis12 tribution entity, 

13 except that the term does not include 

14 any financing that does not facilitate 

15 the sale of a product manufactured by 

16 the entity or its affiliates, as deter17 mined by the Commission. 

18 ‘‘(II) PRODUCT.—The term 

19 ‘product’ means— 

20 ‘‘(aa) any good that is man21 ufactured or sold by an affiliate 

22 of the entity; and 

23 ‘‘(bb) any service that is 

24 provided by an affiliate of the en25 tity. 


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1 ‘‘(III) DISTRIBUTION ENTITY.— 

2 The term ‘distribution entity’ means a 

3 person whose primary business is the 

4 sale, lease or servicing of a product 

5 that is manufactured by the entity or 

6 its affiliates. 

7 ‘‘(IV) AFFILIATE.—The term ‘af8 filiate’ means, with respect to an enti9 ty— 

10 ‘‘(aa) a person that reports 

11 information or prepares financial 

12 statements on a consolidated 

13 basis with the entity, or for 

14 which a parent company reports 

15 information or prepares financial 

16 statements on a consolidated 

17 basis for the person and the enti18 ty; or 

19 ‘‘(bb) a person of which the 

20 entity or the parent of the entity 

21 holds 50 percent or more of the 

22 equity interests. 

23 ‘‘(V) PERSON.—The term ‘per24 son’ means an individual, partnership, 

25 corporation (including a business 


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1 trust), limited liability company, joint 

2 stock company, trust, unincorporated 

3 association, joint venture or other en4 tity, or a government or any political 

5 subdivision or agency thereof.’’. 

6 (b) EXCLUSION FROM SWAP CLEARING REQUIRE7 MENT.—Section 2(h)(7)(C)(iii) of such Act (7 U.S.C. 

8 2(h)(7)(C)(iii)) is amended to read as follows: 

9 ‘‘(iii) EXCLUSION OF CERTAIN CAP10 TIVE FINANCE ENTITIES.—Such term shall 

11 not include an entity excluded from the 

12 definition of major swap participant by 

13 reason of section 1a(33)(D).’’. 

14 SEC. 3. EFFECTIVE DATE. 

15 The amendments made by this Act shall take effect 

16 as if they had been included in subtitle A of title VII of 

17 the Dodd-Frank Wall Street Reform and Consumer Pro18 tection Act. 

Æ 


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