Treasury Secretary Lew Urges House to Reject Derivatives Proposals (with Lofchie Comment and YouTube Link)

U.S. Treasury Secretary, Jack Lew, urged lawmakers to amend Title VII of Dodd-Frank (the derivatives portion of the legislation). Lew sent letters to Rep. Jeb Hensarling (R-Texas), committee chairman, and Rep. Maxine Waters (D-Calif.), ranking member, signaling that the Obama administration intends to continue fighting efforts to amend Dodd-Frank.

Lofchie Comment: As I say in my comments to the description of the various proposed amendments to Dodd-Frank, the proposals are generally not deregulatory. In fact, two of the proposals are intended to correct what the proponents of the legislation admitted were major drafting errors: (i) the requirement that swap dealers collect margin from all end users and (ii) the provisions discriminating against the swaps activities of U.S. branches of non-U.S. banks. I am simply hard pressed to see any policy justification for refusing to correct these errors. Further, I would have to have thought that after three years of experience with trying to implement the legislation, it would be possible even for enthusiasts of the legislation to come up with a list of corrective fixes. YouTube Link.

View letter in full here (links to PDF).Related News Items: House Financial Services Comittees Considers Various Proposed Amendments to Dodd-Frank and JOBS Act (with Lofchie Comment); Chairman Hensarling Statement at Full Committee Markup.