The House Financial Services Committee last Tuesday voted out amended legislation that would change the implementation deadline for certain Title VII derivative reforms in the Dodd-Frank Wall Street Reform Act to Sept. 30, 2012.

The Republican measure (HR 1573) cleared the committee by 30-24, with the vote falling along party lines. The House Agriculture Committee voted out a similar bill earlier this month, postponing implementation of Dodd-Frank until Dec. 31, 2012, but an amendment offered by Rep. Scott Garrett (R-NJ) during last Tuesday’s mark-up moved up the deadline by three months.

While the GOP measure extends the writing deadlines on some provisions — most of the new derivative regulations were supposed to go into effect in July — it leaves the of Dodd-Frank Title VII reforms in tact, said House Financial Services Committee Chairman Spencer Bachus (R-AL). He noted that the bill maintains the current timeframe for defining key swap terms as well as rules requiring the reporting of all over-the-counter contracts.

Moreover, the House GOP bill requires regulators to finish the clearing rules by July 21.

Rep. Barney Frank of Massachusetts, the ranking Democrat on the House panel and one of the authors of Dodd-Frank, argued that the GOP-amended bill does not give regulators — the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission — more time to work on the rules but rather “prevents the regulators from acting when they think they are ready.

“I reject the notion that this [amendment] is aimed at giving them more time.” While the Republican legislation does not repeal Dodd-Frank, it postpones any “substantive regulation of the swaps” market until Sept. 30, 2012 — or two years and three months after Dodd-Frank was passed by Congress, Frank said.

House Republicans introduced HR 1573 in response to industry complaints that the CFTC is rushing the rulemaking process of Title VII of Dodd-Frank. At NGI’s recent GasMart 2011 conference in Chicago, companies also said the rules proposed by the agency so far are too prescriptive (see NGI, May 16).

Dan. M. Berkovitz, general counsel for the CFTC, defended the agency against the accusations. “We believe that we’re proceeding on an appropriate schedule,” he said at the Natural Gas Roundtable in Washington, DC, last Tuesday. The agency is moving forward “efficiently but deliberately.”

Berkovitz said the CFTC supports phasing in the new reforms. “The hammer is not going to drop” on the market on the same day a notice appears in the Federal Register, he said. He further said CFTC Chairman Gary Gensler wants to move to final rulemakings this summer.

Berkovitz declined to speculate on whether HR 1573 would clear Congress. “That’s beyond my capability to give a prediction” on that, Berkovitz said. It’s expected that the measure may pass the House, but would face hurdles in the Senate.

In a related development, a House Appropriations subcommittee last Tuesday voted out a spending bill that would cut the CFTC’s funding by 15% in the next fiscal year — significantly below what it would need to implement reforms under Dodd-Frank.

Earlier this year the White House requested $308 million for the agency to hire additional staff and purchase up-to-date technology to monitor the markets. The CFTC was allocated $202 million for the current fiscal year that ends on Sept. 30, and would be appropriated — under the spending bill proposed by the House Appropriations panel’s Agriculture Subcommittee — $171.93 million for fiscal year 2012.

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