I submitted the following links on H.R. 992 to Rep. Mike Quigley:
The bill, H.R. 992 or the “Swaps Regulatory Improvement Act,” would severely limit the reach of Sec. 716 in Dodd-Frank, which requires banks that are eligible for Federal Deposit Insurance Corporation or Federal Reserve lending discounts to spin off their derivatives activities into separate corporate entities that would not be eligible for federal assistance.
According to the New York Times, lobbyists from Citigroup played a major role in the bill’s creation: “Citigroup’s recommendations were reflected in more than 70 lines of the House committee’s 85-line bill,” Eric Lipton and Ben Protess write. “Two crucial paragraphs, prepared by Citigroup in conjunction with other Wall Street banks, were copied nearly word for word. (Lawmakers changed two words to make them plural.)”
Here was his response:
I voted for HR 992 because it improves derivatives regulation by increasing the transparency and oversight that were the hallmark of the Dodd Frank Act. Many regulators and economists agree Section 716 is problematic because in its current form, it would actually create a MORE dangerous environment in which swaps would trade because they would be removed from the heavily-regulated bank holding companies and put into less-regulated environments. Further, HR 992 does not allow depository institutions to deal in the type of structured asset-backed swaps that contributed significantly to the economic collapse of 2008. As Barney Frank himself said, it “addresses the valid criticisms of Section 716 without weakening the financial reform law’s important derivative safeguards or prohibitions on bank proprietary trading.”
I would love some additional insight from you guys. Have these products or the laws around them been sufficiently changed or... Not so much? Seems like we shouldn't be on the hook for this stuff at all, but then, that's why I'm here asking the questions. Thanks!