House Appropriations Committee - Draft Committee Report on Agriculture Bill (Including the Future of the CFTC)
Commentary by Bob Zwirb
On June 13, 2013, the House Appropriations Committee issued a draft report on the FY 2014 Agriculture Bill, which included appropriations for the CFTC. The Committee's report (1) expressed concerns about the CFTC's regulation, which it described as "duplicative," "overreaching" and "resource intensive"; (2) directed the CFTC to submit cost-benefit studies of such regulations to the Committees of jurisdiction; (3) questioned the CFTC's emphasis on hiring staff rather than improving technology systems to provide the agency with a more efficient way to do business; (4) directed the CFTC to submit a report relating to the swap dealer de minimis exemption; and (5) expressed concerns about the CFTC's elimination of the Administrative Law Judges program and a possible reprogramming of those funds while an investigation regarding the CFTC's reduction-in-force is ongoing. See pp. 2-3 and 57-58 of the Committee report.
Click here to view Draft Committee Report on Agriculture Bill for FY 2014.
Related News: "Proceedings before the Commodity Futures Trading Commission; Final Rule (CFTC - Fed. Reg. Version) (with Zwirb Comment)"(February 26, 2013).
Commentary
An interesting aspect of this report is the fact that the CFTC's elimination of the ALJ position and function last year has apparently caught the attention of the House Appropriations Committee whose report spends as much time on this issue as it does on the CFTC's regulation of swap dealers and swap activities. We commented previously on this development and noted that the action raises concerns that the CFTC, as an expert regulatory agency, no longer has a qualified presiding officer to develop its administrative case law. Apparently, the committee agrees, stating in its report that "[f]urther questions have been raised by the Federal ALJ Conference regarding authority under the Administrative Procedures Act and best practices of CFTC's intention to use non-ALJ hearing officers. Minimum requirements for such hearing officers do not include a law degree, but the officers would still be able to make administrative case law disbarring and disqualifying market participants. The additional fact that CFTC has sole authority to hire and fire these non-ALJ hearing officers removes their ability to make independent decisions free from political influence."