Thursday, January 12, 2017
Hartzler amendment protecting farmer co-ops passes House
An amendment introduced by Rep. Vicky Hartzler (R-Mo.), a member of the House Agriculture Committee, to protect small farmer cooperatives from a burdensome, time-consuming rule aimed at Wall Street traders passed Thursday as part of the Commodity End-User Relief Act.
“In Missouri, and in rural areas across America, smaller grain elevators and cooperatives, which manage risk for and protect the livelihoods of America’s farmers, are unfairly being subjected to this rule that should rightly be aimed at big Wall Street traders,” Hartzler said. “Wall Street is not Main Street, and the Administration seems to ignore this simple fact seemingly with each and every rule it pushes.”
The Hartzler amendment delays implementation of the Commodity Futures Trading Commission (CFTC) Ownership and Control Reports (OCR) Rule until the Commission votes to make three minor, targeted changes to the rule. It adjusts reporting trading volume levels to 300 contracts per day—a far less burdensome threshold than the current 50—, removes the requirements for natural person controller data, and ensures the rule does not require entities to violate foreign privacy laws.
The problem, Hartzler says, is the rule fails to distinguish between a small cooperative in Missouri that may make 60 contracts, or trades, per day and a trader on Wall Street making 6,000. The rule stems from an updated to existing regulations brought about by the controversial Dodd-Frank Act, which was passed in the wake of the financial crisis to impose stricter regulations on those who created the crisis.
“Dodd-Frank never intended to target these traditional end users,” Hartzler continued. “This rule forces our local risk managers through an unnecessary gauntlet. Instead of focusing on managing the risk of fluctuating commodity prices for their farmers, our coops and elevators must expend time and capital complying with these burdensome regulations, a process that often takes days.”
“Many firms are struggling to comply with this rule, while others are forced to turn smaller customers away due to the serious burdens imposed by this rule.”
The Hartzler amendment makes three small changes to the CFTC OCR Rule, but leaves in all critical requirements on reporting parties to submit contact information such as phone numbers, websites, email addresses, physical address etc. for individuals owning more than 10% of entity.
For more on Hartzler’s amendment, click here.
For more on the Commodity End-User Relief Act, click here.