Washington, DC 20510
Re: Support for Passage in the U.S. Senate of H.R. 2682 and H.R. 2779, Two Bills to Protect Derivatives End-Users from Unnecessary Regulation
The undersigned companies urge the Senate to protect main street businesses from unnecessary and costly regulation by taking up and passing two commonsense bills that recently passed with strong bipartisan support in the U.S. House of Representatives—H.R. 2682, the Business Risk Mitigation and Price Stabilization Act of 2011 and H.R. 2779, a Bill to Exempt Inter-Affiliate Swaps from the Regulatory Requirements of Title VII of the Dodd-Frank Act.
Passage of these two bills in the Senate by the end of the current legislative session would help ensure that unnecessary regulations, which could lead to decreased competitiveness and the loss of hundreds of thousands of jobs, are not imposed on main street businesses that use derivatives to manage risks. H.R. 2682 codifies the statements made by the Dodd-Frank Conference Managers that margin requirements should not apply to non-financial businesses that use derivatives to hedge commercial risk. H.R. 2779 prevents internal, inter-affiliate trades from being subject to the same regulatory burdens that were meant for market-facing swaps and ensures that companies are not forced to abandon the technique of hedging through central risk-mitigation centers.
H.R. 2779 and H.R. 2682 were products of bipartisanship and collegiality from their introduction through committee consideration to final passage. The approach taken by representatives from both sides of the aisle to sensibly work through any substantive objections that arose led the House Financial Services Committee to adopt H.R. 2779 by a unanimous vote of 53-0 and the House Agriculture Committee to adopt both bills by voice votes. H.R. 2779 went on to pass the full House by a margin of nearly 10 to 1 (357–36). H.R. 2682 passed the full House by a margin of over 15 to 1 (370-24).
Throughout the legislative and regulatory processes surrounding the Dodd-Frank Act, the Coalition has advocated for strong regulation that brings transparency to the derivatives market and imposes thoughtful new regulatory standards that enhance financial stability while avoiding needless costs. The passage of H.R. 2682 and H.R. 2779 in the Senate would help ensure that new regulations achieve these goals without impeding innovation, diminishing U.S. competitiveness, or restraining job creation and economic expansion.