|00:00:01||PETERSON, AND HIS STAFF FOR THEIR DILIGENT WORK ON THIS BILL ON BEHALF OF END USERS AND SMALL BUSINESS LENDERS.|
|00:00:08||WE HAVE A LONG STANDING TRADITION OF BIPARTISANSHIP AT THE AGRICULTURE COMMITTEE AND THEIR WORK WAS INVALUABLE AND I'D LIKE TO THANK REPRESENTATIVE HARTZLER FOR HER LEADERSHIP ON H.|
|00:00:19||R. 3336 ON BEHALF OF SMALL BUSINESS INSTITUTIONS AND THE BUSINESSES THEY SERVE.|
|00:00:24||I WOULD ALSO LIKE TO ACKNOWLEDGE AND THANK REPRESENTATIVE HULTGREN AND REPRESENTATIVE BOREN WHOSE LEGISLATION, H.|
|00:00:32||R. 3527, WHICH WILL NOT BE CONSIDERED TODAY, AS A RESULT OF THEIR LEADERSHIP AND MR.|
|00:00:38||PETERSON'S SUPPORT, MANY OF THE CRITICAL ISSUES FOR END USERS ADDRESSED IN H.|
|00:00:42||R. 3527 WERE REINTOIFED THE CFTC IN ITS FINAL DEFINITIONS RULE.|
|00:00:48||I THINK WE CAN REASONABLY FEEL ASSURED THAT AGRICULTURAL COOPERATIVES AND OTHER END USERS OUT IN THE COUNTRY SIDE WON'T BE UNNECESSARILY DEEMED SWAP DEALERS AND REGULATED LIKE THE LARGEST FINANCIAL INSTITUTIONS.|
|00:01:00||AS I SAID FROM THE OUTSET, THE CFTC ON ITS OWN RESOLVES CONCERNS, WE HAVE -- CONCERNS WE HAVE RAISED FOR MONTHS IN OUR COMMITTEE ROOM WE WOULD NOT PROCEED WITH LEGISLATION AND THAT'S WHAT WE'RE -- WHAT WE'VE DONE WITH H.|
|00:01:18||HOWEVER, CONCERNS OF THE IMPLEMENTATION OF TITLE SEVEN REMAIN AND SO WE ARE HERE TODAY TO PROCEED WITH H.|
|00:01:26||THIS BILL ADDRESSES ISSUES THAT ARE IMPORTANT TO COMMUNITY AND FARM CREDIT BANKS.|
|00:01:31||ORGANIZATIONS WHICH ARE INSTRUMENTAL TO THE ECONOMIC VITALITY OF OUR TOWNS AND RURAL COMMUNITIES.|
|00:01:37||IN THE DODD-FRANK ACT, CONGRESS WAS CAREFUL TO ENSURE THAT NEW REGULATIONS WOULDN'T IMPOSE UNNECESSARY COSTS ON SMALL INSTITUTIONS THAT MIGHT DETER THEM FROM EXTENDING CREDIT TO BUSINESSES ACROSS AMERICA.|
|00:01:51||SMALL BANKS POSE VERY LITTLE RISK TO OUR FINANCIAL SYSTEM.|
|00:01:55||WITHIN THE BANKING SYSTEM, 96% OF THE NOTIONAL VALUE OF DERIVATIVES IS HELD BY THE FIVE LARGEST BANKS.|
|00:02:07||THE VERY SMALL REMAINING PERCENTAGES OF DERIVATIVES EXPOSURE IS SPREAD ACROSS HUNDREDS OF SMALL INSTITUTIONS.|
|00:02:14||THAT'S WHY CONGRESS NEVER INTENDED FOR THESE COMMUNITY LEADERS TO BE REGULATED LENDERS -- LENDERS, I SHOULD SAY, TO BE REGULATED IN THE SAME FASHIONS THE LARGEST GLOBAL FINANCIAL INSTITUTIONS.|
|00:02:26||THIS BILL AIMS TO RESTORE CONGRESSIONAL INTENT BY EXEMPTING SMALL BANKS, CREDIT UNIONS, NONPROFIT COOPERATIVE LEPPEDERS AND FARM CREDIT INSTITUTIONS -- LENDERS AND FARM CREDIT INSTITUTIONS FROM COSTLY QUERY INQUIRIES UNDER DODD-FRANK AND ENSURES THAT THEY CAN CONTINUE OTO PROVIDE RISK MANAGEMENT TOOLS TO THEIR BORROWERS.|
|00:02:49||IN ADDITION, THANKS TO THE LEADERSHIP OF REPRESENTATIVES SCHILLING, OWENS, AND MCINTYRE, THIS WILL ENSURE CAPTIVE FINANCIAL AFFILIATES OF MANUFACTURING COMPANIES LIKE JOHN DEERE AND CATERPILLAR ARE ELIGIBLE FOR THE SAME EXEMPTIONS AS THEIR PARENT COMPANIES AND OTHER END USERS.|
|00:03:07||THESE AFFILIATES ARE AN IMPORTANT SOURCE OF CREDIT TO CONSUMERS AND BUSINESSES AND PROMOTE OUR MANUFACTURING SECTOR.|
|00:03:14||LASTLY, THROUGH THE HARD WORK OF REPRESENTATIVES COSTA, CARDOZA, AND BACA, H.|
|00:03:21||R. 3336 CLARIFIES THAT UTILITIES WILL NOT BE MISCAST AS SWAP DEALERS BECAUSE THEY ENTER INTO CONTRACTS THAT ARE REQUIRED BY STATE LAW.|
|00:03:32||. THE LEGISLATION CLARIFIES COMPLYING WITH STATE LAWS ALONE WON'T DRAW NEW AND COSTLY FEDERAL REGULATIONS.|
|00:03:40||THERE ARE MANY MEMBERS ON BOTH SIDES OF THE AISLE AT THE AG COMMITTEE WHO HAVE SPENT TIME GETTING THIS BILL TO WHERE IT IS TODAY.|
|00:03:47||WE HAVE BEEN CAREFUL NOT TO CREATE LOOPHOLES OR TO STRAY FROM CONGRESSIONAL INTENT.|
|00:03:52||THE BILL DOES NOT OPEN THE DOOR FOR LARGE FINANCIAL PLAYERS TO EVADE REGULATIONS OR ENGAGE IN SPECULATIVE OR HIGHLY RISKIE ACTIVITIES.|
|00:04:00||MADAM SPEAKER, IN THIS ECONOMY IT ALL COMES BACK TO JOBS.|
|00:04:05||TO CREATE NEW JOBS, BUSINESSES NEED ACCESS TO CREDIT TO MAKE NEW INVESTMENTS.|
|00:04:11||THIS BILL ENSURES THAT BUSINESSES MAINTAIN ACCESS TO CREDIT FROM COMMUNITY LENDERS.|
|00:04:16||SO I URGE MY COLLEAGUES, SUPPORT H.|
|00:04:21||R. 3336 AND ENSURE THAT AMERICA'S SMALL BUSINESSES CAN CONTINUE TO ACCESS THE CREDIT THEY NEED TO BUILD OUR ECONOMY.|
|00:04:30||MADAM SPEAKER, I YIELD BACK THE BALANCE OF MY TIME AND RESERVE.|
|00:04:33||THE SPEAKER PRO TEMPORE: THE GENTLEMAN FROM OKLAHOMA RESERVES.|
|00:04:36||THE GENTLEMAN FROM MINNESOTA.|
Mr. LUCAS. Madam Speaker, I yield myself such time as I may consume.
Madam Speaker, I rise to voice my support for this bill. First and foremost, I would like to thank my committee's ranking member, Mr. Peterson, and his staff for their diligent work on this bill on behalf of end-users and small business lenders. We have a longstanding tradition of bipartisanship at the Agriculture Committee, and their work was invaluable. I'd like to thank Representative Hartzler for her leadership on H.R. 3336 on behalf of the small business institutions and the businesses they serve.
I would like to acknowledge and thank Representative Hultgren and Representative Boren, whose legislation, H.R. 3527, will not be considered today. As a result of their leadership and Mr. Peterson's support, many of the critical issues for end-users addressed in H.R. 3527 were resolved by the CFTC in its final ``definitions rule.'' I think we can reasonably feel assured that agricultural cooperatives and other end-users out in the countryside won't be unnecessarily deemed ``swap dealers'' and regulated like the largest financial institutions. As I said from the outset, if the CFTC on its own resolves concerns we have raised for months in our committee room, we would not proceed with legislation. And that's what we've done with H.R. 3527. However, concerns with the implementation of title VII remain, and so we are here today to proceed with H.R. 3336. This bill addresses issues that are important to community and farm credit banks--organizations which are instrumental to the economic vitality of our towns and rural communities.
In the Dodd-Frank Act, Congress was careful to ensure that new regulations wouldn't impose unnecessary costs on small institutions that might deter them from extending credit to businesses across America. Small banks pose very little risk to our financial system. Within the banking system, 96 percent of the notional value of derivatives is held by the five largest banks. The very small remaining percentage of the derivatives exposure in our financial system is spread across hundreds of small institutions. That's why Congress never intended for these community lenders to be regulated the same as the largest global financial institutions.
[Time: 14:00] This bill aims to restore Congressional intent by exempting small banks, credit unions, nonprofit cooperative lenders, and farm credit institutions from costly clearing requirements under Dodd-Frank. It also ensures that banks can continue to provide risk management tools to their borrowers.
In addition, thanks to the leadership of Representatives Schilling, Owens, and McIntyre, provisions of H.R. 3336 will ensure captive finance affiliates of manufacturing companies like John Deere and Caterpillar are eligible for the same exemptions as their parent companies and other end-users. These affiliates are an important source of credit to consumers and businesses and promote our manufacturing sector.
Lastly, through the hard work of Representatives Costa, Cardoza, and Baca, H.R. 3336 clarifies that utilities will not be miscast as swap dealers because they enter into contracts that are required by State law. The legislation clarifies that complying with State laws alone won't also draw new and costly Federal regulations.
There are many Members on both sides of the aisle at the Ag Committee who have spent time getting this bill to where it is today. We have been careful not to create loopholes or to stray from congressional intent. The bill does not open the door for large financial players to evade regulations or engage in speculative or highly risky activities.
Madam Speaker, in this economy, it all comes back to jobs. To create new jobs, businesses need access to credit to make new investments. This bill ensures that businesses maintain access to credit from community lenders.
So I urge my colleagues to support H.R. 3336 and ensure that America's small businesses can continue to access the credit they need to build our economy.
Madam Speaker, I reserve the balance of my time.