Boswell Joins DeLauro and Welch in Introducing Bill to Fully Fund CFTC and Prevent Next MF Global

Press Release

With the former head of the now-defunct MF Global set to testify on Capitol Hill today, Reps. Leonard Boswell (D-Iowa), Rosa DeLuaro (D-Conn.) and Peter Welch (D-Vt.) are introducing legislation to fully fund the Commodities Future Trading Commission (CFTC) so it can regulate the risky financial transactions that contributed to the 2008 financial crisis, the recent collapse of MF Global and the speculation-driven rise in energy prices.

The Wall Street Accountability through Sustainable Funding Act will create a stable, sustainable funding mechanism for the CFTC. Currently the Commission relies on an annual appropriation from Congress to fulfill its mandate. Its FY2012 budget was cut by 33% and further cuts would occur under the scheduled budget sequestration.

The Boswell/DeLauro/Welch bill would create a new funding mechanism for the CFTC modeled after the Security and Exchange Commission's funding source. Under their plan, the CFTC would cover its annual budget by collecting transaction fees from all market participants.

Rep. Leonard Boswell said, "Unfortunately, the CFTC has been the target of Wall Street lobbyists who have worked to limit the effectiveness of the Commission's ability to prevent these issues we're faced with today with the collapse of MF Global. This bill will provide the necessary robust funding, which is also deficit neutral, to ensure the Commission is provided adequate resources to reclaim its critical watchdog role."

Rep. Rosa DeLauro said, "Americans want accountability from Wall Street. But this year's budget cuts to CFTC funding mean that it will not have the ability to regulate the risky financial transactions that caused the 2008 financial crisis and, more recently, the collapse of MF Global. That is why we are introducing the Wall Street Accountability through Sustainable Funding Act, which will ensure that the CFTC has the tools it needs to protect American consumers and uphold the law. We need to put Main Street before Wall Street, and that means making sure that the CFTC has the resources it needs to do its job properly. We can do that through this bill. I look forward to introducing it and seeing it passed."

Rep. Peter Welch said, "If you want stable markets, you need a stable regulator. This legislation will fully fund the consumer's cop on the beat without taxpayer dollars. For too long, Congress has used the CFTC budget as a political whipping boy at the expense of stable markets. Our proposal will make sure it has predictable and reliable resources to do its job so that future MF Globals are stopped in their tracks."

Following the 2008 financial crisis, Congress enacted the Dodd-Frank Wall Street Reform and Consumer Protection Act, giving the CFTC new authority to regulate risky financial transactions. The CFTC has identified 32 areas where new rules will be necessary to implement the law. Without adequate funding, the CFTC will not be able to effectively implement and enforce these reforms.

Other federal regulatory agencies funded through user fees include: Securities and Exchange Commission, Federal Energy Regulatory Commission, US Patent and Trademark Office, Federal Communications Commission, Nuclear Regulatory Commission, National Credit Union Association, Federal Housing Finance Agency and Federal Deposit Insurance Corporation.

Source