November 20, 2008 CONGRESSIONAL RECORD — SENATE S10747 

(4) waive the applicability to that facility 

of any provision of section 8111(e) of title 38, 

United States Code, as specified by the Secretaries. 

By Mr. HARKIN: 

S. 3714. A bill to amend the Commodity Exchange Act to ensure that 

all agreements, contracts, and transactions with respect to commodities 

are carried out on a regulated exchange, and for other purposes; to the 

Committee on Agriculture, Nutrition, 

and Forestry. 

Mr. HARKIN. Mr. President, today, I 

am introducing legislation—the Derivatives Trading Integrity Act—which 

calls for establishing stronger standards of openness, transparency and integrity in the trading of financial 

swaps and other over-the-counter derivatives as a critical step toward rebuilding and restoring confidence in 

the financial system. With the total 

face value of swaps reaching a high of 

some $531 trillion at the middle of this 

year—8-and-a-half times the world 

GDP of $62 trillion—it is long past time 

for accountability in these markets. 

Over the years, the Commodity Futures Trading Commission and Congress have responded to concerns of the 

the swaps industry by allowing instruments that are in form and function futures contracts to be privately negotiated without the safeguards provided 

through exchange trading. 

The economic downturn in this country is forcing us to examine all contributing factors to the crisis in our financial markets. By restoring reasonable 

safeguards and regulation of swaps, including credit default swaps, along 

with all other futures contracts, this 

legislation will go a long way to restore confidence in the markets and reestablish soundness and integrity in 

the financial system. My bill will end 

the unregulated ‘‘casino capitalism’’ 

that has engendered great risks in 

swaps trading. And it will bring these 

transactions out into the sunlight 

where they can be monitored and appropriately and responsibly regulated. 

This legislation will establish authority and safeguards to ensure that parties can meet their obligations to manage and reduce danger and risk to the 

entire financial system and economy. 

Virtually all contracts now commonly referred to as swaps fall under 

the definition of futures contracts and 

function basically in the same manner 

as futures contracts. This bill amends 

the Commodity Exchange Act to eliminate the distinction in futures contracts among ‘‘excluded’’ and ‘‘exempt’’ commodities and regulated, exchange-traded commodities; futures 

contracts for all commodities would be 

treated the same. 

In addition, the bill eliminates the 

statutory exclusion of swap transactions from regulation, and it ends 

the Commodity Futures Trading Commission’s authority to exempt such 

transactions from the general requirement that a contract for the purchase 

or sale of a commodity for future delivery can only trade on a regulated board 

of trade. In effect, this means that all 

futures contracts must trade on a designated contract market or a derivatives transaction execution facility. 

Last month, the Senate Committee 

on Agriculture, Nutrition and Forestry 

heard dramatic testimony about the 

impact of unregulated financial derivatives on the U.S. economy. We have 

seen large negative consequences from 

the lack of price transparency and the 

failure to properly measure and 

collateralize the risk in trading overthe-counter derivatives. The problems 

have not been in the trading of financial futures on regulated futures markets, subject to the oversight of the 

Commodity Futures Trading Commission. 

This legislation I am introducing will 

establish the standards that all futures 

contracts trade on regulated exchange. 

The regulated exchanges will work 

with the Commodity Futures Trading 

Commission to ensure that trading on 

the exchange is fair and equitable and 

not subject to abuses. The Commodity 

Futures Trading Commission has the 

experience and expertise to oversee 

these matters. 

Bringing necessary openness, transparency, soundness, and integrity to 

trading in contracts which are now unregulated over-the-counter swaps and 

related derivatives is a key element in 

restoring trust and confidence in the financial system so that we can rebuild 

our economy on a solid foundation. 

Mr. President, I ask unanimous consent that the text of the bill be printed 

in the RECORD. 

There being no objection, the text of 

the bill was ordered to be printed in 

the RECORD, as follows: 

S. 3714 

Be it enacted by the Senate and House of Representatives of the United States of America in 

Congress assembled, 

SECTION 1. SHORT TITLE. 

This Act may be cited as the ‘‘Derivatives 

Trading Integrity Act of 2008’’. 

SEC. 2. REGULATION OF CERTAIN AGREEMENTS, 

CONTRACTS, AND TRANSACTIONS. 

(a) DEFINITIONS.—Section 1a of the Commodity Exchange Act (7 U.S.C. 1a) is amended— 

(1) by striking paragraphs (10), (11), (13), 

(14), and (33); and 

(2) by redesignating— 

(A) paragraph (12) as paragraph (10); 

(B) paragraphs (15) through (32) as paragraphs (11) through (28), respectively; and 

(C) paragraph (34) as paragraph (29). 

(b) EXCLUSIONS.—Section 2 of the Commodity Exchange Act (7 U.S.C. 2) is amended— 

(1) by striking subsections (d), (e), (g), (h), 

and (i); and 

(2) by redesignating subsection (f) as subsection (d). 

(c) RESTRICTION OF FUTURES TRADING TO

CONTRACT MARKETS OR DERIVATIVES TRANSACTION EXECUTION FACILITIES.—Section 4 of 

the Commodity Exchange Act (7 U.S.C. 6) is 

amended— 

(1) in subsection (a), in the matter preceding paragraph (1), by striking ‘‘Unless exempted by the Commission pursuant to subsection (c), it shall’’ and inserting ‘‘It shall’’; 

(2) by striking subsection (c); and 

(3) by redesignating subsection (d) as subsection (c). 

(d) EXEMPT BOARDS OF TRADE.—Section 5d 

of the Commodity Exchange Act (7 U.S.C. 7a– 

3) is repealed. 

SEC. 3. CONFORMING AMENDMENTS. 

(a) Section 1a of the Commodity Exchange 

Act (7 U.S.C. 1a) (as amended by section 

2(a)(2)) is amended— 

(1) in paragraph (10)(A)(x), by striking 

‘‘(other than an electronic trading facility 

with respect to a significant price discovery 

contract)’’; 

(2) in paragraph (25)— 

(A) in subparagraph (C), by inserting ‘‘and’’ 

after the semicolon at the end; 

(B) in subparagraph (D), by striking ‘‘; 

and’’ and inserting a period; and 

(C) by striking subparagraph (E); and 

(3) in paragraph (27), by striking ‘‘section 

2(c), 2(d), 2(f), or 2(g) of this Act’’ and inserting ‘‘subsection (c) or (d) of section 2’’. 

(b) Section 2(c) of the Commodity Exchange Act (7 U.S.C. 2(c)) is amended— 

(1) in paragraph (1)— 

(A) in the matter preceding subparagraph 

(A), by striking ‘‘5d,’’; and 

(B) in subparagraph (F), by striking ‘‘in an 

excluded commodity’’; and 

(2) in paragraph (2)(B)(i)(II)— 

(A) in item (cc), by striking ‘‘section 1a(20) 

of this Act’’ each place it appears and inserting ‘‘section 1a(16)’’; and 

(B) in item (dd), by striking ‘‘section 

1a(12)(A)(ii) of this Act’’ and inserting ‘‘section 1a(10)(A)(ii)’’. 

(c) Section 4a of the Commodity Exchange 

Act (7 U.S.C. 6a) is amended— 

(1) in subsection (a)— 

(A) in the first sentence, by striking ‘‘or on 

electronic trading facilities with respect to a 

significant price discovery contract’’; and 

(B) in the second sentence, by striking ‘‘or 

on an electronic trading facility with respect 

to a significant price discovery contract,’’; 

(2) in subsection (b)— 

(A) in paragraph (1), by striking ‘‘or electronic trading facility with respect to a significant price discovery contract’’; and 

(B) in paragraph (2), in the matter preceding the proviso, by striking ‘‘or electronic 

trading facility with respect to a significant 

price discovery contract’’; and 

(3) in subsection (e)— 

(A) in the first sentence— 

(i) in the matter preceding the proviso— 

(I) by striking ‘‘or by any electronic trading facility’’; 

(II) by striking ‘‘or on an electronic trading facility’’; and 

(III) by striking ‘‘or electronic trading facility’’; and 

(ii) in the proviso, by striking ‘‘or electronic trading facility’’; and 

(B) in the second sentence, in the matter 

preceding the proviso, by striking ‘‘or electronic trading facility with respect to a significant price discovery contract’’. 

(d) Section 4g(a) of the Commodity Exchange Act (7 U.S.C. 6g(a)) is amended by 

striking ‘‘and in any significant price discovery contract traded or executed on an 

electronic trading facility or’’. 

(e) Section 4i of the Commodity Exchange 

Act (7 U.S.C. 6i) is amended— 

(1) in the matter preceding paragraph (1), 

by striking ‘‘or any significant price discovery contract traded or executed on an 

electronic trading facility’’; and 

(2) in the matter following paragraph (2), 

by striking ‘‘or electronic trading facility’’. 

(f) Section 5a of the Commodity Exchange 

Act (7 U.S.C. 7a) is amended— 

(1) in subsection (b)(2)— 

(A) in subparagraph (D)(ii), by inserting 

‘‘or’’ after the semicolon at the end; 

(B) in subparagraph (E), by striking ‘‘; or’’ 

and inserting a period; and 


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S10748 CONGRESSIONAL RECORD — SENATE November 20, 2008 

(C) by striking subparagraph (F); and 

(2) in subsection (g)— 

(A) in the heading, by striking ‘‘ELECTION

TO TRADE EXCLUDED AND EXEMPT COMMODITIES’’ and inserting ‘‘EXCLUDED SECURITIES’’; 

and 

(B) in paragraph (1)— 

(i) by striking ‘‘excluded or exempt commodities other than’’ and inserting ‘‘commodities other than an agricultural commodity enumerated in section 1a(4) or’’; and 

(ii) by striking ‘‘, 2(d), or 2(g) of this Act, 

or exempt under section 2(h) of this Act’’. 

(g) Section 5b of the Commodity Exchange 

Act (7 U.S.C. 7a–1) is amended— 

(1) in subsection (a)(1), by striking ‘‘section 

2(a)(1)(C)(i), 2(c), 2(d), 2(f), or 2(g) of this Act 

or title IV of the Commodity Futures Modernization Act of 2000, or exempted under 

section 2(h) or 4(c) of this Act’’ and inserting 

‘‘subsection (a)(1)(C)(i), (c), or (d) of section 2 

or title IV of the Commodity Futures Modernization Act of 2000 (Public Law 106–554; 114 

Stat. 2763A457)’’; and 

(2) in subsection (b), by striking ‘‘section 

2(c), 2(d), 2(f), or 2(g) of this Act or title IV 

of the Commodity Futures Modernization 

Act of 2000, or exempted under section 2(h) or 

4(c) of this Act’’ and inserting ‘‘subsection 

(c) or (d) of section 2 or title IV of the Commodity Futures Modernization Act of 2000 

(Public Law 106–554; 114 Stat. 2763A457)’’. 

(h) Section 5c of the Commodity Exchange 

Act (7 U.S.C. 7a–2) is amended— 

(1) in subsection (a)(1), by striking ‘‘and 

section 2(h)(7) with respect to significant 

price discovery contracts,’’; 

(2) in subsection (b)— 

(A) in paragraph (1), by striking ‘‘, derivatives transaction execution facility, or electronic trading facility with respect to a significant price discovery contract’’ and inserting ‘‘or derivatives transaction execution 

facility’’; and 

(B) in paragraphs (2) and (3), by striking ‘‘, 

derivatives transaction execution facility, or 

electronic trading facility’’ each place it appears and inserting ‘‘or derivatives transaction execution facility’’; and 

(3) in subsection (d)(1), in the matter preceding subparagraph (A), by striking ‘‘or 

2(h)(7)(C) with respect to a significant price 

discovery contract traded or executed on an 

electronic trading facility,’’. 

(i) Section 5e of the Commodity Exchange 

Act (7 U.S.C. 7b) is amended by striking ‘‘or 

revocation of the right of an electronic trading facility to rely on the exemption set 

forth in section 2(h)(3) with respect to a significant price discovery contract,’’. 

(j) Section 5f(b)(1) of the Commodity Exchange Act (7 U.S.C. 7b–1(b)(1)) is amended in 

the matter preceding subparagraph (A), by 

striking ‘‘section 5f’’ and inserting ‘‘this section’’. 

(k) Section 6(b) of the Commodity Exchange Act (7 U.S.C. 8(b)) is amended— 

(1) in the first sentence— 

(A) by striking ‘‘or to revoke the right of 

an electronic trading facility to rely on the 

exemption set forth in section 2(h)(3) with 

respect to a significant price discovery contract,’’; and 

(B) by striking ‘‘or electronic trading facility’’; and 

(2) in the second sentence, in the matter 

preceding the proviso, by striking ‘‘or electronic trading facility’’. 

(l) Section 12(e) of the Commodity Exchange Act (7 U.S.C. 16(e)) is amended by 

striking paragraph (2) and inserting the following: 

‘‘(2) EFFECT.—This Act supersedes and preempts the application of any State or local 

law that prohibits or regulates gaming or 

the operation of bucket shops (other than 

antifraud provisions of general applicability) 

in the case of an agreement, contract, or 

transaction that is excluded from this Act 

under— 

‘‘(A) subsection (c) or (d) of section 2; or 

‘‘(B) title IV of the Commodity Futures 

Modernization Act of 2000 (Public Law 106– 

554; 114 Stat. 2763A457).’’. 

(m) Section 15(b) of the Commodity Exchange Act (7 U.S.C. 19(b)) is amended by 

striking ‘‘4(c) or’’. 

(n) Section 22(b)(1)(A) of the Commodity 

Exchange Act (7 U.S.C. 25(b)(1)(A)) is amended by striking ‘‘by section 2(h)(7) or sections 

5 through 5c’’ and inserting ‘‘under sections 

5 through 5c’’. 

(o) Section 13106(b)(1) of the Food, Conservation, and Energy Act of 2008 (7 U.S.C. 2 

note; Public Law 110–246) is amended by 

striking ‘‘section 1a(32)’’ and inserting ‘‘section 1a’’. 

By Mr. LEVIN (for himself, Mr. 

BOND, Ms. STABENOW, Mr. 

VOINOVICH, Mr. BROWN, Mr. 

SPECTER, and Mr. CASEY): 

S. 3715. A bill to provide for emergency bridge loan assistance to automobile manufacturers and component 

suppliers; to the Committee on Appropriations. 

Mr. President, I am pleased to introduce with my colleagues the Auto Industry Emergency Bridge Loan Act. 

This legislation is the product of a 

bipartisan effort to provide bridge 

loans of up to $25 billion to the auto industry. Auto industries around the 

world, including China and Europe, are 

requesting loans from their governments because of the dramatic decline 

of the global economy and the drastic 

reduction in car purchases and the 

availability of credit. 

Our proposition is not only bipartisan. It is a hybrid proposal combining 

provisions from many sources. 

We incorporate Leader REID’S provisions on strong taxpayer protections, 

including stock warrants for the government, provisions restricting executive compensation, including bonuses 

and golden parachutes, and provisions 

requiring long term plans for financial 

viability. Suppliers are also made eligible for the loans. 

The language of Chairman BARNEY

FRANK, of the House Financial Services 

Committee, was heavily utilized including retention of Section 136’s environmental standards, such as 25 percent improvement in fuel economy and 

Tier II emissions standards. His oversight board membership approach is 

also included. 

The White House opposed the use of 

any of the $700 billion, already-appropriated stabilization fund, and the Majority Leader said yesterday that there 

were not enough votes in the Senate to 

pass an amendment using those funds. 

We cannot allow the issue of which 

source of already appropriated funds 

will be used for the essential purpose of 

preventing the economy from sliding 

into a depression, which is a real possibility if one or more of the domestic 

auto companies goes under, given the 

impact of the auto industry on millions 

of jobs, on suppliers that are in most of 

our States and on all of our communities which have Big 3 auto dealers. 

So we agreed that the only alternative which can prevent those disastrous results is for the funding stream 

for the loans to come from the socalled Section 136 appropriation that 

we provided earlier this year in the 

consolidated Security, Disaster Assistance, and Continuing Appropriations 

Act, 2009. However, the structure of 

Section 136 is preserved in permanent 

law for the balance of its appropriation 

not utilized for loans, and the environmental standards of section 136, including strengthened fuel economy and 

emissions standards, are preserved. 

Also, loan repayments will be used to 

replenish Section 136, along with any 

proceeds from the sale of company 

stock owned by the government. 

Under our proposal, this emergency 

bridge loan program would be administered by the Secretary of Commerce. 

The time for Congress to act on this 

pressing issue is growing short. People 

in communities across this country are 

anxiously watching to see what we are 

going to do. They are sick with worry. 

Not acting on a solution will provoke 

anger and frustration in hundreds of 

communities which supply components 

or have auto dealers. This is a Main 

Street issue—a direct jobs issue for 

millions of families. 

I know there is frustration with the 

past actions of the U.S. auto companies. Some blame them for the quality 

problems of the 1970s, or for paying 

their executives and their workers too 

much, or for not moving aggressively 

enough to produce advanced technology, fuel efficient cars. But we can’t 

throw millions of jobs, a vital segment 

of our industrial base and our economy 

overboard just because of this frustration. 

President Bush, President-elect 

Obama, and the leadership and probably a majority of the Congress all 

agree that we needed to provide bridge 

loans to support the U.S. auto industry, and I am pleased that the leadership of the Congress has said that we 

will address this issue beginning December 8. 

The stakes for our future economic 

security and well-being are enormous. 

One way or another, we must provide 

the bridge loans for the domestic auto 

industry—for the sake of millions of 

workers and their future and to keep 

our economy from being pushed into a 

depression. 

I want to thank the cosponsors of 

this legislation, Senator BOND, Senator 

STABENOW, Senator VOINOVICH, Senator 

BROWN, Senator SPECTER and Senator 

CASEY for their assistance in preparing 

this bipartisan legislation, and I urge 

my colleagues to join us in supporting 

it. 

Mr. President, I ask unanimous consent that the text of the bill be printed 

in the RECORD. 

There being no objection, the text of 

the bill was ordered to be printed in 

the RECORD, as follows: 


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