On a party-line vote, the House agreed to debate a bill drafted by the House Agriculture Committee to reauthorize the Commodity Futures Trading Commission, which oversees the derivatives market, including futures contracts. The Republican-controlled House acted one day after the White House threatened to veto the bill “because it undermines the efficient functioning” of the CFTC. The House bill creates barriers within the agency to writing new regulations, said the administration. “HR 2289 also offers no solution to address the present inadequacy of the agency’s funding,” said the White House in arguing for fees on the financial industry.
Several customer protections were written into the bill in response to the collapse of trading houses MF Global and Peregrine Financial; they require clearer tracking of customer funds and trading houses to notify CFTC if they become under-capitalized, and they clarify that assets of bankrupt firms can be used to reimburse customers for funds that had been improperly diverted from their accounts.
It was not clear how soon the House would vote on the CFTC bill. Republican leaders scheduled work on an appropriations bill for today, the last day of work for the week.