Former Senator Blanche Lincoln Voices Support for the CFTC Reauthorization Bill

Blanche Lincoln, the former Democratic Senator from Arkansas who was one of the leading proponents of Dodd-Frank, published an opinion piece in Forbes. The article discussed the difference between Dodd-Frank's intent and the effect of its execution on the OTC derivatives market.

Former Senator Lincoln asserted that manufacturers and other businesses that use derivatives to hedge normal risk are "still up in the air" about whether they will have to set aside millions of dollars to comply with proposed margin requirements under Dodd-Frank. The current rules leave end users uncertain about the true impact of the legislation. Senator Lincoln urged regulators to act "as soon as possible to provide much-needed certainty" to manufacturers and other end users so that they would not face costly margin requirements when managing risk.

Senator Lincoln referenced legislation that the House passed last year to allow nonfinancial end users to be exempt from mandatory margin requirements. In light of S. 888's being stalled in the Senate, she stated, the recent CFTC reauthorization bill is "one avenue for advancing this critical fix for manufacturers," which could include key end user exemptions from certain regulatory requirements. Senator Lincoln urged the House and Senate to support the CFTC reauthorization bill so that end users might use "capital for job creation and investment rather than keeping it on the sidelines."

See: Senator Blanche's piece in Forbes.Related news: House Votes to Reauthorize the CFTC (June 24, 2014); House Committee on Rules Releases Amended Customer Protection and End User Relief Act (June 12, 2014); House Agriculture Committee Approves Bipartisan Legislation to Reauthorize CFTC (with Lofchie Comment) (April 9, 2014); House Agriculture Committee Introduces Legislation to Reauthorize CFTC (with Lofchie Comment) (April 8, 2014).