|
|
|
|
Van Hollen Statement on The Small Business Credit Availability Act (HR 3336)
Washington,
Apr 25, 2012 -
Mr. Speaker, while there is a legitimate role for swaps and other derivatives when it comes to managing risk, one of the inescapable lessons from the last economic crisis is the havoc those instruments can cause when they are insufficiently regulated.
In an effort to make sure the abuses that led to the Great Recession never happen again, the Dodd-Frank Wall Street Reform Act properly placed these kinds of transactions under far more meaningful prudential regulation. Just last week, the Commodity Futures Trading Commission finalized the “swap dealer” rule at issue in today’s legislation.
Unfortunately, that final rule — already the product of compromise at the CFTC — is further weakened by the misleadingly named “Small Business Credit Availability Act” to the point where its ability to protect the public from the systemic risk it was originally intended to prevent is undermined.
For example, we should not let big oil companies speculate in the oil futures markets without limit or oversight under the guise of hedging their commercial operations. Furthermore, we should not exempt vast swaths of our credit and debt markets from prudential regulation under the CFTC rule. Yet that’s precisely what this bill proposes to do.
Mr. Speaker, we know where this road leads, and we simply can’t afford to go back there.
I support smart regulation that permits the legitimate uses of these instruments for the benefits they can provide while eliminating the speculative abuses that can cause the rest of us so much harm. And that is why I oppose today’s legislation.
I yield back the balance of my time.
|
Print version of this document
|
Congressman Chris Van Hollen
