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 ex-
emptions for captive finance companies from the defini-
tion of major swap participant and from the swap clear-
ing requirement. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Manufacturing Cer-
tainty and Captive Finance Affiliate Clarification Act’’. 
VerDate Mar 15 2010 
00:33 May 12, 2012
Jkt 019200
PO 00000
Frm 00001
Fmt 6652
Sfmt 6201
E:\BILLS\H5649.IH
H5649
tjames on DSK6SPTVN1PROD with BILLS
SEC. 2. CLARIFICATION OF THE EXEMPTIONS FOR CAPTIVE 
FINANCE COMPANIES FROM THE DEFINITION 
OF MAJOR SWAP PARTICIPANT AND FROM 
THE SWAP CLEARING REQUIREMENT. 
(a) EXCLUSION FROM DEFINITION OF MAJOR SWAP 
PARTICIPANT.—Section 1a(33)(D) of the Commodity Ex-
change Act (7 U.S.C. 1a(33)(D)) is amended to read as 
follows: 
‘‘(D) EXCLUSION OF CERTAIN CAPTIVE FI-
NANCE ENTITIES.— 
‘‘(i) IN
GENERAL.—The definition 
under this paragraph shall not include an 
entity whose primary business is providing 
financing that facilitates the sale or lease 
of products by or on behalf of the parent 
company or another subsidiary of the par-
ent company, and uses derivatives only for 
the purpose of hedging underlying com-
mercial risks in a consolidated financing 
and leasing portfolio, at least 90 percent of 
which, as of the end of its preceding fiscal 
year, is qualifying financing (including 
loans, notes, installment sales contracts, 
receivables, and operating and financing 
leases). 
VerDate Mar 15 2010 
00:33 May 12, 2012
Jkt 019200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6201
E:\BILLS\H5649.IH
H5649
tjames on DSK6SPTVN1PROD with BILLS
‘‘(ii) DEFINITIONS.—In this subpara-
graph: 
‘‘(I) QUALIFYING
FINANCING.— 
The 
term 
‘qualifying 
financing’ 
means— 
‘‘(aa) any financing or lease 
of, or that includes, a product; or 
‘‘(bb) any financing to or for 
the benefit of an affiliate of the 
entity, a distribution entity, or 
any customer or affiliate of a dis-
tribution entity, 
except that the term does not include 
any financing that does not facilitate 
the sale of a product manufactured by 
the entity or its affiliates, as deter-
mined by the Commission. 
‘‘(II) 
PRODUCT.—The 
term 
‘product’ means— 
‘‘(aa) any good that is man-
ufactured or sold by an affiliate 
of the entity; and 
‘‘(bb) any service that is 
provided by an affiliate of the en-
tity. 
VerDate Mar 15 2010 
00:33 May 12, 2012
Jkt 019200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6201
E:\BILLS\H5649.IH
H5649
tjames on DSK6SPTVN1PROD with BILLS
‘‘(III) DISTRIBUTION
ENTITY.— 
The term ‘distribution entity’ means a 
person whose primary business is the 
sale, lease or servicing of a product 
that is manufactured by the entity or 
its affiliates. 
‘‘(IV) AFFILIATE.—The term ‘af-
filiate’ means, with respect to an enti-
ty— 
‘‘(aa) a person that reports 
information or prepares financial 
statements on a consolidated 
basis with the entity, or for 
which a parent company reports 
information or prepares financial 
statements on a consolidated 
basis for the person and the enti-
ty; or 
‘‘(bb) a person of which the 
entity or the parent of the entity 
holds 50 percent or more of the 
equity interests. 
‘‘(V) PERSON.—The term ‘per-
son’ means an individual, partnership, 
corporation 
(including 
a 
business 
VerDate Mar 15 2010 
00:33 May 12, 2012
Jkt 019200
PO 00000
Frm 00004
Fmt 6652
Sfmt 6201
E:\BILLS\H5649.IH
H5649
tjames on DSK6SPTVN1PROD with BILLS
trust), limited liability company, joint 
stock company, trust, unincorporated 
association, joint venture or other en-
tity, or a government or any political 
subdivision or agency thereof.’’. 
(b) EXCLUSION FROM SWAP CLEARING REQUIRE-
MENT.—Section 2(h)(7)(C)(iii) of such Act (7 U.S.C. 
2(h)(7)(C)(iii)) is amended to read as follows: 
‘‘(iii) EXCLUSION
OF
CERTAIN
CAP-
TIVE FINANCE ENTITIES.—Such term shall 
not include an entity excluded from the 
definition of major swap participant by 
reason of section 1a(33)(D).’’. 
SEC. 3. EFFECTIVE DATE. 
The amendments made by this Act shall take effect 
as if they had been included in subtitle A of title VII of 
the Dodd-Frank Wall Street Reform and Consumer Pro-
tection Act. 
Æ 
VerDate Mar 15 2010 
00:33 May 12, 2012
Jkt 019200
PO 00000
Frm 00005
Fmt 6652
Sfmt 6301
E:\BILLS\H5649.IH
H5649
tjames on DSK6SPTVN1PROD with BILLS