Date: 2014-06-23
Speaker: DAVID SCOTT (democrat)
Chamber: H
State: Georgia

Mr. Chairman. we have before us perhaps the most important piece of legislation to add fluidity to a very complex. complicated financial arena in which we are in. and that is in the area of derivatives. swaps dealing. and dealing on the international stage as the worlds number one economyvery complex. very complicated. History has shown that the United States is a leader in the world. particularly in economic affairs. We are here today to deal with reauthorization of the CFTC at a time when we have just come out of a very serious economic downturn. Now. I agree with my distinguished ranking member. We have worked very closely on this. and quite honestly. there is nobody in Congress that has the knowledge of financial services as does our ranking member. The ranking member and I have worked diligently to try to bring a serious bit of compromise to this area. She raises a good point. Let me take a couple of her concerns. so I can share with you how we have addressed those. The first one is the cross border. The claim that we are opening up and doing business with foreign governments and foreign jurisdictions that have no regulations there and we acquire riskhere is what we are doing. and I want to make sure we are clear. I serve on the Agriculture Committee as the ranking member on the Derivatives Subcommittee. and I serve on the Financial Services Committee. The very cross border that we are talking about has been debated. has been argued. and has been passed by this House in the form of H.R. 1256. Now. here is what needs to be understood: we have minimized totally any risk of importation of damage to our economy with the exemption of the top ninenot all the foreign governments and not the foreign jurisdictionswe are exempting the top nine largest swap dealers who deal in derivatives of foreign jurisdictions. and it will be the CFTC. in conjunction and jointly through joint rulemaking with the SEC. As Chairman Peterson pointed out. they are at loggerheads now. The first order of business is to get them to agree on a rule. and 270 days after that. that rule would go into effect. and immediately. the top five of those foreign jurisdictions that have rules and regulations that are equitable to ourswhich. again. will be determined jointly by the SEC and the CFTCwill go into effect. One year after that. the remaining four will go into effect. so what we have here is a check and balance right there. They will determine that criteria. We put something else in there. as well. to address Ms. WATERS very legitimate concern. We said that: look. once the CFTC has done this jointly with the SEC. then what we will do is any one of those foreign jurisdictions who do not measure up to having the equal amount of robust regime on their regulations. they will disavow them. and within 30 days. they must send to the Congress of the United Statesspecifically to the House Financial Services Committee. the Senate Banking Committee. the House Agriculture Committee. and the Senate Agriculture Committeethe reason why. Stop right there. That back door is closed tight. There will be no seepage. If these nine foreign countries that we work withand. Mr. Chairman. you must realize that. historically. we are the leader. we have to show the way here. and we are not going to put in practice any way where there is any leakage that will come back to us that will be damaging to our system. it will be in the hands of where it needs to be. the regulators. They will determine if their rules and regulations meet ours. and if they dont. they will let Congress know. and then they will not be allowed. The other point. Mr. Chairman. is we have end users. This bill isnt just about banking. This bill is about farmers. This bill is about people who make things. We are the worlds leading economy. We dont do business just in the United States. we do them all around the world. If we dont put this inthis cross border inwe will be putting our business community on the international stage in a very disadvantaged competitive position. So I submit to my friend. Ms. WATERS. that we have certainly dealt with that. Now. the costbenefit analysisfirst of all. Ms. WATERS should take credit for this because she really. on H.R. 1062. which was a mandate that we do. we changed that. thanks to you. and this is clearly an adjustment.