[Congressional Record (Bound Edition), Volume 159 (2013), Part 6]
[House]
[Pages 8754-8770]
[From the U.S. Government Publishing Office, www.gpo.gov]




                    SWAP JURISDICTION CERTAINTY ACT

  Mr. HENSARLING. Mr. Speaker, pursuant to House Resolution 256, I call 
up the bill (H.R. 1256) to direct the Securities and Exchange 
Commission and the Commodity Futures Trading Commission to jointly 
adopt rules setting forth the application to cross-border swaps 
transactions of certain provisions relating to swaps that were enacted 
as part of the Dodd-Frank Wall Street Reform and Consumer Protection 
Act, and ask for its immediate consideration in the House.
  The Clerk read the title of the bill.
  The SPEAKER pro tempore. Pursuant to House Resolution 256, the 
amendments recommended by the Committee on Financial Services, printed 
in the bill, are adopted. The bill, as amended, is considered read.
  The text of the bill, as amended, is as follows:

                               H.R. 1256

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Swap Jurisdiction Certainty 
     Act''.

     SEC. 2. JOINT RULEMAKING ON CROSS-BORDER SWAPS.

       (a) Joint Rulemaking Required.--
       (1) In general.--Not later than 270 days after the date of 
     enactment of this Act, the Securities and Exchange Commission 
     and the Commodity Futures Trading Commission shall jointly 
     issue rules setting forth the application of United States 
     swaps requirements of the Securities Exchange Act of 1934 and 
     the Commodity Exchange Act relating to cross-border swaps and 
     security-based swaps transactions involving U.S. persons or 
     non-U.S. persons.
       (2) Construction.--The rules required under paragraph (1) 
     shall be identical, notwithstanding any difference in the 
     authorities granted the Commissions in section 30(c)

[[Page 8755]]

     of the Securities Exchange Act of 1934 (15 U.S.C. 78dd(c)) 
     and section 2(i) of the Commodity Exchange Act (7 U.S.C. 
     2(i)), respectively, except to the extent necessary to 
     accommodate differences in other underlying statutory 
     requirements under such Acts, and the rules thereunder.
       (b) Considerations.--The Commissions shall jointly issue 
     rules that address--
       (1) the nature of the connections to the United States that 
     require a non-U.S. person to register as a swap dealer, major 
     swap participant, security-based swap dealer, or major 
     security-based swap participant under each Commission's 
     respective Acts and the regulations issued under such Acts;
       (2) which of the United States swaps requirements shall 
     apply to the swap and security-based swap activities of non-
     U.S. persons, U.S. persons, and their branches, agencies, 
     subsidiaries, and affiliates outside of the United States and 
     the extent to which such requirements shall apply; and
       (3) the circumstances under which a non-U.S. person in 
     compliance with the regulatory requirements of a foreign 
     jurisdiction shall be exempt from United States swaps 
     requirements.
       (c) Rule in Accordance With APA Required.--No guidance, 
     memorandum of understanding, or any such other agreement may 
     satisfy the requirement to issue a joint rule from the 
     Commissions in accordance with section 553 of title 5, United 
     States Code.
       (d) General Application to Countries or Administrative 
     Regions Having Nine Largest Markets.--
       (1) General application.--In issuing rules under this 
     section, the Commissions shall provide that a non-U.S. person 
     in compliance with the swaps regulatory requirements of a 
     country or administrative region that has one of the nine 
     largest combined swap and security-based swap markets by 
     notional amount in the calendar year preceding issuance of 
     such rules, or other foreign jurisdiction as jointly 
     determined by the Commissions, shall be exempt from United 
     States swaps requirements in accordance with the schedule set 
     forth in paragraph (2), unless the Commissions jointly 
     determine that the regulatory requirements of such country or 
     administrative region or other foreign jurisdiction are not 
     broadly equivalent to United States swaps requirements.
       (2) Effective date schedule.--The exemption described in 
     paragraph (1) and set forth under the rules required by this 
     section shall apply to persons or transactions relating to or 
     involving--
       (A) countries or administrative regions described in such 
     paragraph, or any other foreign jurisdiction as jointly 
     determined by the Commissions, accounting for the five 
     largest combined swap and security-based swap markets by 
     notional amount in the calendar year preceding issuance of 
     such rules, on the date on which final rules are issued under 
     this section; and
       (B) the remaining countries or administrative regions 
     described in such paragraph, and any other foreign 
     jurisdiction as jointly determined by the Commissions, 1 year 
     after the date on which such rules are issued.
       (3) Criteria.--In such rules, the Commissions shall jointly 
     establish criteria for determining that one or more 
     categories of regulatory requirements of a country or 
     administrative region described in paragraph (1) or other 
     foreign jurisdiction is not broadly equivalent to United 
     States swaps requirements and shall jointly determine the 
     appropriate application of certain United States swap 
     requirements to persons or transactions relating to or 
     involving such country or administrative region or other 
     foreign jurisdiction. Such criteria shall include the scope 
     and objectives of the regulatory requirements of a country or 
     administrative region described in paragraph (1) or other 
     foreign jurisdiction as well as the effectiveness of the 
     supervisory compliance program administered, and the 
     enforcement authority exercised, by such country or 
     administrative region or other foreign jurisdiction, and such 
     other factors as the Commissions, by rule, jointly determine 
     to be necessary or appropriate in the public interest.
       (4) Required assessment.--Beginning on the date on which 
     final rules are issued under this section, the Commissions 
     shall begin to jointly assess the regulatory requirements of 
     countries or administrative regions described in paragraph 
     (1), as the Commissions jointly determine appropriate, in 
     accordance with the criteria established pursuant to this 
     subsection, to determine if one or more categories of 
     regulatory requirements of such a country or administrative 
     region or other foreign jurisdiction is not broadly 
     equivalent to United States swaps requirements.
       (e) Report to Congress.--If the Commissions make the joint 
     determination described in subsection (d)(1) that the 
     regulatory requirements of a country or administrative region 
     described in such subsection or other foreign jurisdiction 
     are not broadly equivalent to United States swaps 
     requirements, the Commissions shall articulate the basis for 
     such a determination in a written report transmitted to the 
     Committee on Financial Services and the Committee on 
     Agriculture of the House of Representatives and the Committee 
     on Banking, Housing, and Urban Affairs and the Committee on 
     Agriculture, Nutrition, and Forestry of the Senate within 30 
     days of the determination. The determination shall not be 
     effective until the transmission of such report.
       (f) Definitions.--As used in this Act and for purposes of 
     the rules issued pursuant to this Act, the following 
     definitions apply:
       (1) The term ``U.S. person''--
       (A) means--
       (i) any natural person resident in the United States;
       (ii) any partnership, corporation, trust, or other legal 
     person organized or incorporated under the laws of the United 
     States or having its principal place of business in the 
     United States;
       (iii) any account (whether discretionary or non-
     discretionary) of a U.S. person; and
       (iv) any other person as the Commissions may further 
     jointly define to more effectively carry out the purposes of 
     this Act; and
       (B) does not include the International Monetary Fund, the 
     International Bank for Reconstruction and Development, the 
     Inter-American Development Bank, the Asian Development Bank, 
     the African Development Bank, the United Nations, their 
     agencies and pension plans, and any other similar 
     international organizations and their agencies and pension 
     plans.
       (2) The term ``United States swaps requirements'' means the 
     provisions relating to swaps and security-based swaps 
     contained in the Commodity Exchange Act (7 U.S.C. 1a et seq.) 
     and the Securities Exchange Act of 1934 (15 U.S.C. 78a et 
     seq.) that were added by title VII of the Dodd-Frank Wall 
     Street Reform and Consumer Protection Act (15 U.S.C. 8301 et 
     seq.) and any rules or regulations prescribed by the 
     Securities and Exchange Commission and the Commodity Futures 
     Trading Commission pursuant to such provisions.
       (g) Conforming Amendments.--
       (1) Securities exchange act of 1934.--Section 36(c) of the 
     Securities Exchange Act of 1934 (15 U.S.C. 78mm(c)) is 
     amended by inserting ``or except as necessary to effectuate 
     the purposes of the Swap Jurisdiction Certainty Act,'' after 
     ``to grant exemptions,''.
       (2) Commodity exchange act.--Section 4(c)(1)(A) of the 
     Commodity Exchange Act (7 U.S.C. 6(c)(1)(A)) is amended by 
     inserting ``or except as necessary to effectuate the purposes 
     of the Swap Jurisdiction Certainty Act,'' after ``to grant 
     exemptions,''.

  The SPEAKER pro tempore. Debate shall not exceed 1 hour, with 40 
minutes equally divided and controlled by the chair and ranking 
minority member of the Committee on Financial Services and 20 minutes 
equally divided and controlled by the chair and ranking minority member 
of the Committee on Agriculture.
  The gentleman from Texas (Mr. Hensarling) and the gentlewoman from 
California (Ms. Waters) each will control 20 minutes. The gentleman 
from Texas (Mr. Conaway) and the gentleman from Georgia (Mr. David 
Scott) each will control 10 minutes.
  The Chair recognizes the gentleman from Texas.


                             General Leave

  Mr. HENSARLING. Mr. Speaker, I ask unanimous consent that all Members 
have 5 legislative days within which to revise and extend their remarks 
and submit extraneous material for the Record on H.R. 1256, currently 
under consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Texas?
  There was no objection.
  Mr. HENSARLING. Mr. Speaker, I yield myself such time as I may 
consume.

                              {time}  1530

  Mr. Speaker, the legislation before the House this afternoon, H.R. 
1256, the Swap Jurisdiction Certainty Act, is a bipartisanship response 
to what many view to be, frankly, regulatory red tape overreach and the 
adverse consequences that it can have on the millions of our fellow 
countrymen who are either unemployed or underemployed--the impact that 
it could have on the competitiveness of our U.S. employers and job 
creators.
  Mr. Speaker, I need not tell anyone in this body that we regrettably 
continue to be in the middle of a nonrecovery recovery. If it weren't 
for the fact that so many people have actually left the job force--the 
working participation rate--our unemployment rate would be even higher. 
Many have just given up.
  We know that for many, even though America has, in the past, produced 
3\1/2\ percent economic growth and is probably capable of 4 or 5 
percent economic growth with the right economic policies, regrettably, 
we find ourselves mired in 1\1/2\ to 2 percent GDP growth,

[[Page 8756]]

which means, Mr. Speaker, a lot of American dreams go unfulfilled and a 
lot of our constituents lay awake at night wondering how are they going 
to pay the bills.
  So, Mr. Speaker, jobs continue to be job number one, I believe, of 
the United States House of Representatives. But, regrettably, those who 
create jobs, those who employ our constituents, are drowning in a sea 
of red tape. There's been an over 50 percent increase in regulations 
under the Obama administration. We know that it is directly correlated 
to the lackluster economic growth that we see in the Nation today.
  I still vividly remember that one small business person in east Texas 
came up to me--he had a small cabinetry shop. Even though it was still 
profitable, he shut it down. He shut it down because of the red tape 
burden that crushed him and the jobs of 17 people who worked in east 
Texas. And he said, Congressman, it got to the point I just thought my 
Federal Government didn't want me to succeed.
  Mr. Speaker, we always have to be vigilant in ensuring that the red 
tape burden doesn't strangle the jobs and hopes and aspirations of the 
American people. So that brings us to H.R. 1256, the Swap Jurisdiction 
Certainty Act.
  Now, many of you who may be tuning in to this debate may not be quite 
familiar with the world of derivatives, but it's a way that many 
farmers, ranchers, manufacturers hedge risk in order to become 
successful companies and employ people and sell their goods and 
services at competitive prices. An outfit like John Deere will use a 
derivative. They may do an interest rate swap as they finance a tractor 
for some farmer in rural east Texas that I may represent. That 
derivative is directly linked to the cost and the availability of that 
tractor.
  What we are trying to do with H.R. 1256 is make sure that those who 
are trying to access derivatives, to hedge risk, to create and sustain 
jobs, don't automatically overnight have huge swaps of the global 
market pulled out from under them because, if they do, all of a sudden 
it could be that somebody can't finance that tractor anymore.
  Companies like Southwest Airlines that operate in my hometown of 
Dallas, Texas, they hedge their fuel cost; and if they can't access 
global markets, who knows about the success of their hedges. Then, all 
of a sudden, the price of a trip for grandparents to fly in from Kansas 
City to see their grandkids in Dallas, Texas, just became more 
prohibitive, it just became more expensive.
  An outfit like Coors, they'll hedge their aluminum cost through 
swaps, maybe their wheat costs through swaps. And I don't know about 
other Members, but I represent a lot of hardworking people in the Fifth 
District of Texas; and let me tell you, sometimes on a hot August 
afternoon after working, putting in 40 hours at the Pepsi bottling 
plant or maybe putting it in at some of the other factories that we may 
have in Mesquite, somebody might just want to go to the 7-Eleven and 
buy a six-pack. In America that ought to be their right. And the 
inability--the inability--to access global markets for swaps ultimately 
can actually inflate that cost. That's not something I care to deny to 
hardworking Americans who want that.
  This is a very simple and bipartisan bill. Mr. Speaker, this passed. 
We had a hearing in the Financial Services Committee and we had a 
markup in the Financial Services Committee. It passed with 100 percent 
of the Republican vote. It passed with almost two-thirds of the 
Democratic vote. You would think that we might be under the suspension 
calendar for this one, but in order to respect the wishes of the 
ranking member, we are having a more prolonged debate in addition to 
the one that we've already had in the committee.
  But, Mr. Speaker, ultimately, this bill will do two things. It will 
tell the Securities and Exchange Commission and the Commodity Futures 
Trading Commission, You need to issue one joint rule when it comes 
really to American end users being able to access global markets, not 
one suggestion and one rule, two different rules--one rule. One rule. 
Let's take down a little complexity here.
  Mr. Speaker, after Dodd-Frank, we're about to celebrate its 3rd 
anniversary next month. After 3 years of deliberating, maybe it's time 
to actually come out with a rule and create a little certainty for the 
people at Coors and at Southwest Airlines and at all the other 
employers and John Deere. Maybe it's time to create a little certainty. 
So the bill says, Okay, let's get this done in 9 months. You've had 
almost 3 years. It's time to get it done.
  And last but not least, in order not to pull the rug out from under 
these people on day one, it says, Do you know what? The nine largest 
markets, we are going to have a presumption that their regimes are 
broadly equivalent to the U.S. and not immediately deny access.
  Now, at any given time, if the CFTC and SEC come to the conclusion 
that these regimes are not broadly equivalent, that somehow they 
present risk to our economy, with the stroke of a pen they can change 
that presumption. But not on day one, not on day one, Mr. Speaker.
  So, for the sake of economic growth, for the sake of jobs, to provide 
some certainty in a struggling economy, I would urge all--all--of my 
colleagues to support this bipartisan legislation that was voice voted 
in the Ag Committee, voice voted, and had unanimous--unanimous--consent 
of all Republicans and almost two-thirds of the Democrats on the 
Financial Services Committee, urge all my colleagues to support H.R. 
1256.
  I reserve the balance of my time.
  Ms. WATERS. Mr. Speaker, I yield myself such time as I may consume.
  I would like to try to clear up some of the misunderstandings of what 
this bill is about. The more we debate it, the better Members 
understand the impact of this bill on our economy.
  The gentleman from Texas, the chairman, just talked about how 
generous they are in allowing this debate to take place. Members, let 
me tell you what really happened. The fact of the matter is there has 
been an attempt to hide H.R. 1256 in this DOD bill. What business does 
it have in this bill? Why is it the Rules Committee determined that it 
would be a closed rule?
  The first reason is that they tried to get away without having 
amendments to the bill. I had an amendment that I offered in committee 
that was not accepted, an amendment that if there were an open rule, I 
would have been able to offer this amendment on the floor. But, no, 
they close-ruled this bill to keep any amendments from being heard, to 
be debated, to be voted on, because they know that if Members really 
discover what these derivatives are all about and how they could create 
such risk that we'll be put in the position of bailing out failed 
institutions all over again, that Members would not support this kind 
of bill.

                              {time}  1540

  This country has been through a terrible financial crisis. Part of 
the reason is that we allowed our banks and financial institutions to 
place unregulated bets on the mortgage markets. Remember AIG? What did 
AIG do? It made a really big bet that the mortgage market would go up, 
and it lost, and the taxpayer was put in the position of having to bail 
it out. The Dodd-Frank Act enabled us to put a stop to that kind of 
betting going on, hidden from the rest of us, finally dragging that 
activity out into the sunlight.
  The CFTC and the SEC are finally putting in place rules of the road 
to prevent any one institution from threatening our livelihood again, 
but this bill wants to drag some of that activity back into the 
shadows, allowing banks and others, once again, to enter into 
transactions without even our regulators being able to see them.
  You may say that this bill just concerns the limits on how far U.S. 
law goes. So why is it so important that the CFTC and SEC have 
discretion over the rules on cross-border initiatives? Because the 
exposure that a foreign branch or subsidiary of a U.S. institution 
takes in foreign markets comes back home to the U.S. Moreover, U.S. 
banks and corporations may find that

[[Page 8757]]

those they do business with have much more hidden exposure because of 
foreign transactions. This bill says that we will have to rely on the 
foreign regulators to protect us. We shouldn't have to rely on foreign 
regulators who don't even have regulatory regimes to protect us. We 
should protect ourselves by making sure that anybody our branches and 
our subsidiaries are doing business with have comparable rules. Those 
countries must have comparable rules to the U.S. rules in order to 
protect us.
  To put it simply, this bill would delay the implementation of the 
Wall Street Reform Act's derivatives provisions by months, if not 
years, and would preserve the kind of opacity in our markets that led 
to taxpayers' bailing out AIG just 5 short years ago.
  For example, while Europe has made considerable progress on its 
swaps' clearing and reporting rules, Europe's framework for 
implementing trading and internal business conduct standards have been 
caught up in delays. It is unclear at this point how strong those 
requirements ultimately will be. This bill increases the incentives for 
other jurisdictions to avoid making the tough decisions to put in a 
strong financial framework.
  I reserve the balance of my time.


                Announcement by the Speaker Pro Tempore

  The SPEAKER pro tempore. The Chair will remind all persons in the 
gallery that they are here as guests of the House and that any 
manifestation of approval or disapproval of proceedings or other 
audible conversation is in violation of the rules of the House.
  Mr. HENSARLING. I yield myself 30 seconds just to say to the 
gentlelady that she had the opportunity to offer her amendment in 
committee, and her amendment was defeated. Second of all, as she raises 
the specter of bailout, she has also said before that Dodd-Frank ended 
bailouts, so I don't know which it is. I would also say nothing in the 
bill changes the rulemaking authority of the CFTC or the SEC, and it 
delays nothing, but it was just 6 months ago that the ranking member 
sent a letter to the chairman of the CFTC:

       I request that you provide for phased-in compliance and 
     appropriate short-term relief from relevant title VII 
     provisions.

  So she, herself, was asking for a delay.
  I now yield 5 minutes to the chairman of the Subcommittee on Capital 
Markets and Government Sponsored Enterprises, the author of this 
legislation, the gentleman from New Jersey (Mr. Garrett).
  Mr. GARRETT. I thank the gentleman from Texas for yielding. I also 
want to thank the gentleman from Delaware (Mr. Carney), the gentleman 
also from Texas (Mr. Conaway) and the gentleman from Georgia (Mr. 
Scott), who all, along with us, were able to work together in a 
bipartisan manner on this legislation.
  I want to begin my comments today by clearing up what might be called 
a knee-jerk reaction that some commentators have made about our efforts 
on this legislation.
  Today's legislation is not about deregulating the swap markets or 
creating loopholes for market participants. In fact, this bill is just 
the opposite of that. You see, there is broad bipartisan support for 
appropriately regulating the swap markets and for shining the 
proverbial light of day, if you will, on what was once an opaque 
marketplace. I agree that bringing greater additional transparency and 
clarity to this market is a positive thing for all--for American 
consumers and taxpayers as well.
  Yet I have significant concerns about how the ongoing Dodd-Frank 
implementation of this appropriate regulation is being conducted. Only 
in Washington, D.C., would you have two, not one, regulatory bodies 
tasked to work together to implement rules required by Congress and 
then have them working down two separate, entirely different tracks on 
rules that will impact literally hundreds of American businesses and 
thousands of investors.
  What you have is one agency over here. It's moving forward with a 
100-page informal guidance, and the other, on the other hand, has just 
released a 1,000-page formal rule proposal. One proposal applies U.S. 
regulations to transactions taking place entirely outside the U.S. 
between the U.S. nonpersons, and the other creates a new, detailed 
substitute compliance framework. So it's hard to imagine a scenario in 
which these two proposals are more different. In effect, we have two 
very powerful U.S. regulators. Both of them have literally hundreds 
upon hundreds of millions of dollars in budget and thousands of staff, 
but at the end of the day, they cannot sit down together and work out a 
common proposal.
  That's not what Dodd-Frank wanted them to do. They wanted them to 
come together, and that's what this legislation would effectuate. H.R. 
1256, the Swap Jurisdiction Certainty Act, will restore that much-
needed sanity to the rule-writing of this extraterritorial application 
of U.S. swaps regulation.
  Again, given that there has been some confusion and a great deal of 
mischaracterization by some commentators on the impact of this 
legislation, let me take a moment to make certain everyone understands 
exactly what it does and the effects it will have. You see, the 
legislation before us allows the CFTC and the SEC to continue to enjoy 
significant discretion and also flexibility as to how they implement 
the rules. We are not removing any of their current authority. In fact, 
we are adding to it, and we are enhancing it.
  First and foremost, the legislation specifically requires the SEC and 
the CFTC to have the same or identical cross-border rules. I think it's 
difficult--maybe it's impossible--for anyone to suggest that it is 
appropriate for two domestic U.S. regulatory bodies to have two 
different standards governing very similar parts of the market. So, by 
simply requiring the agencies to get together and have identical rules, 
the bill will limit the ability for potential arbitrage opportunities 
for the market participants, and it will ensure that we have standard 
identical regulatory regimes for both types of swaps. There is a great 
deal of ongoing discussion right now about how to limit this, about how 
to limit regulatory arbitrage opportunities for market participants. 
Under this new regime, the most glaring area of potential in this area 
is if the SEC and the CFTC have different rules;
  Secondly, the legislation would require a formal rule, not a 
guidance, to be issued. Currently, the CFTC is moving down the path of 
instituting a more amorphous guidance, if you will, which really has 
questionable legal authority. So, without a formal rule in place that 
carries the force of law, there is a valid concern that some entities 
won't feel the need to even abide by this guidance from the CFTC or, if 
it's challenged by a court, will feel that it might carry considerably 
less weight. So, by requiring a formal rule, the bill will then ensure 
that the force of law will apply without question;
  Finally, the legislation specifically authorizes the SEC and CFTC to 
regulate swap transactions between the U.S. and foreign entities. Now, 
this is important if the regulators are concerned about the importation 
of systemic risk. Why is this important? Because under current law, it 
is really questionable what authority these agencies actually have to 
regulate potential transactions between the U.S. and foreign 
participants. We add this to it and give them that explicit authority.

                              {time}  1550

  So if the regulators are concerned about any foreign country not 
living up to the Obama administration's G-20 commitments that was 
established back in 2009, then these regulators will be able to work 
together to specifically authorize under the act.
  This expansion and enhancement, if you will, of the regulators' 
current authority--I would think it should be well received by the 
administration.
  The SPEAKER pro tempore. The time of the gentleman has expired.
  Mr. HENSARLING. I yield the gentleman an additional 45 seconds.
  Mr. GARRETT. Finally, in a formal Statement of Administration Policy, 
the administration argues that the bill

[[Page 8758]]

will somehow slow down implementation of title VII. This can't be 
further from the truth. By requiring the agencies to work together and 
put the same rule, this will remove legal obstacles here in Washington 
and ensure that we have the appropriate regulatory framework sooner 
rather than later. It will remind the people saying that we will 
somehow slow down implementation of these rules that, no, that cannot 
be further from the truth. Dodd-Frank was passed almost 3 years ago, 
and we're no closer today than we were 3 years ago to getting this 
done.
  Mr. Speaker, let us restore, then, some common sense and some clarity 
to the rulemaking process and actually bring it some additional 
transparency. Let us not play into the narrative that the rest of the 
country has of a dysfunctional Washington. Let us make sure that our 
financial regulators are actually working together and not trying to 
allow some to front-end each other.
  Let us pass this legislation.
  Ms. WATERS. Mr. Speaker, at this time I enter into the Record three 
letters of opposition to this bill. One is from the Executive Office of 
the President of the United States Office of Management and Budget; 
Americans for Financial Reform; and American Federation of Labor and 
Congress of Industrial Organizations.

         American Federation of Labor and Congress of Industrial 
           Organizations,
                                    Washington, DC, June 11, 2013.
       Dear Representative: The AFL-CIO opposes the ``Swaps 
     Jurisdiction Certainty Act'' (H.R. 1256) scheduled for floor 
     consideration this week. If passed, this bill would undermine 
     the framework Congress put in place in the Dodd-Frank Wall 
     Street Reform and Consumer Protection Act of 2010 to prevent 
     risky derivatives trading from contributing to another global 
     financial crisis. It would impose major new procedural 
     hurdles that would impede the Commodity Futures Trading 
     Commission's (CFTC) ability to move forward with effective 
     rules designed to prevent risks that arise from overseas 
     derivatives trading from impacting the U.S. economy.
       The 2008 financial crisis provided vivid illustrations of 
     how derivatives transactions conducted by U.S. institutions 
     in overseas markets can wreak havoc on the U.S. economy--both 
     the AIG bailout and the Lehman Brothers failure were caused 
     to a large extent by offshore derivatives trades.
       As we saw with AIG and Lehman Brothers, U.S. institutions 
     can easily conduct derivatives transactions outside U.S. 
     borders that put U.S. financial institutions at risk. With 
     this in mind, Congress granted the CFTC, which regulates 
     around 90 percent of U.S. derivatives markets, authority in 
     Section 722(d) of Dodd-Frank to oversee derivatives 
     transactions that ``have a direct and significant connection 
     with activities in, or effect on, commerce of the United 
     States.''
       The CFTC has issued proposed guidance that strikes an 
     appropriate balance. It protects U.S. taxpayers and the U.S. 
     economy while allowing overseas subsidiaries of U.S. banks to 
     be regulated under `substituted compliance' by their local 
     regulator when the CFTC makes a specific determination that 
     the relevant foreign rules are as strong as the U.S. rules.
       H.R. 1256 would seriously undermine the CFTC's ability to 
     protect U.S. taxpayers from risks that arise from overseas 
     derivatives trading by creating a presumption that these 
     transactions are exempt from U.S. regulation. To overcome 
     this presumption, the CFTC and the Securities and Exchange 
     Commission (SEC) would be required to determine that the 
     foreign country rules are not `broadly comparable' to U.S. 
     rules, issue joint rules, and make formal reports to 
     Congress.
       The CFTC's ability to effectively oversee offshore 
     derivatives transactions that create risks to the U.S. 
     economy is central to whether Title VII is ultimately 
     successful in mitigating the risks in the derivatives markets 
     that nearly brought down the economy less than five years 
     ago.
       Don't let another AIG or Lehman Brothers happen under your 
     watch. Vote against the ``Swaps Jurisdiction Certainty Act'' 
     (H.R. 1256) and prevent a major loophole from undermining the 
     basic derivatives market protections that Congress so 
     sensibly put in place when it passed Dodd-Frank in 2010.
           Sincerely,
                                                   William Samuel,
     Director, Government Affairs Department.
                                  ____



                               Americans for Financial Reform,

                                    Washington, DC, June 11, 2013.
       Dear Representative, on behalf of Americans for Financial 
     Reform, we are writing to express our opposition to HR 1256, 
     the ``Swaps Jurisdiction Certainty Act''. This legislation is 
     supported by Wall Street because it opens a back door in 
     financial regulation that could allow the largest 
     international banks to evade U.S. derivatives regulation by 
     transacting through their foreign subsidiaries.
       Proper oversight of foreign subsidiaries is critical for 
     any derivatives regulation to be effective. In the financial 
     crisis, AIG required a $160 billion public bailout for 
     activities conducted through its London office, and more 
     recently JP Morgan's `London Whale' lost the company $6 
     billion. Bloomberg News has documented that large Wall Street 
     banks routinely transact well over half of their swaps 
     business through foreign subsidiaries. For this reason, the 
     Dodd-Frank Act granted the Commodity Futures Trading 
     Commission (CFTC), which regulates some 90 percent of U.S. 
     derivatives transactions, oversight over all derivatives 
     transactions that have ``a direct and significant connection 
     with'' U.S. commerce. Yet HR 1256 would block and hinder this 
     oversight in numerous ways, including by establishing a 
     presumption that derivatives regulations in major foreign 
     markets are adequate to satisfy U.S. derivatives protections. 
     By doing so, it could encourage U.S. financial firms to 
     outsource operations to foreign jurisdictions with weaker 
     rules.
       The proper oversight of international derivatives 
     transactions is crucial to effective regulation of U.S. 
     derivatives markets. Financial transactions that are 
     nominally booked in overseas subsidiaries of U.S. banks 
     create risk for the U.S. parent. We have learned this lesson 
     in many crises, most recently in the massive derivatives 
     losses experienced at JP Morgan's London office, and most 
     painfully in the world financial collapse of 2008. As the 
     chair of the Commodity Futures Trading Commission (CFTC) has 
     stated:
       Swaps executed offshore by U.S. financial institutions can 
     send risk straight back to our shores. It was true with the 
     London and Cayman Islands affiliates of AIG, Lehman Brothers, 
     Citigroup and Bear Stearns. A decade earlier it was true, as 
     well, with Long-Term Capital Management. The nature of modern 
     finance is that large financial institutions set up hundreds, 
     if not thousands of ``legal entities'' around the globe.  .  
     .
       Many of these far-flung legal entities, however, are still 
     highly connected back to their U.S. affiliates.
       The CFTC, the agency assigned to regulate some 90 percent 
     of U.S. derivatives markets, is already addressing this vital 
     issue. The agency has proposed guidance that would protect 
     U.S. taxpayers and the U.S. economy by preserving 
     jurisdiction over derivatives transactions executed through 
     foreign entities which impact the U.S. economy. The CFTC's 
     balanced approach would apply Dodd-Frank oversight to such 
     transactions, but also allow foreign entities to be regulated 
     under `substituted compliance' by their local regulator when 
     the agency finds that the relevant foreign rules are as 
     strong as the U.S. rules.
       Crucially, the CFTC has taken the position that 
     `substituted compliance' under foreign rules would only be 
     permitted in cases where the U.S. regulators found foreign 
     regulation to be genuinely equivalent to the relevant U.S. 
     regulation. Maintaining this principle is critical to 
     protecting U.S. taxpayers from the risks of offshore swaps by 
     U.S. institutions. If it is not maintained, we could see a 
     `race to the bottom' as derivatives transactions move to the 
     least regulated jurisdictions to take advantage of lax rules. 
     This is particularly dangerous since foreign countries are 
     not exposed to the risks to the U.S. taxpayer created due to 
     derivatives losses in foreign subsidiaries of U.S. banks.
       HR 1256 would seriously undermine the capacity of 
     regulators to assure that U.S. derivatives transactions 
     conducted through foreign entities are subject to regulations 
     that meet U.S. standards. It does this in several ways.
       First, HR 1256 would effectively create a presumption that 
     overseas derivatives transactions will be ruled by foreign 
     country rulemaking rather than U.S. rulemaking. The current 
     CFTC guidance only permits `substituted compliance' when U.S. 
     regulators determine that relevant foreign rules are as 
     strong as the U.S. rules. But HR 1256 instead establishes a 
     strong statutory presumption that transactions in the world's 
     major derivatives markets will be governed by foreign 
     regulatory rules in the host country rather than U.S. rules. 
     The statutory presumption that foreign rules govern could 
     only be overturned if both the CFTC and SEC make a joint 
     determination, supported by a formal report to Congress, that 
     the foreign country rules are not `broadly comparable' to 
     U.S. rules. This determination could be challenged in court 
     on the basis of the `broadly comparable' language in HR 1256, 
     creating significant litigation risk.
       Thus, U.S. regulators would face major new hurdles in 
     applying derivatives rules to overseas transactions, even 
     where these transactions clearly posed a risk to the U.S. 
     economy. This would not only weaken protections for U.S. 
     financial markets, it would weaken the U.S. negotiating 
     position in pressing foreign governments for adequate 
     derivatives rules. The statutory roadblocks to properly 
     enforcing U.S. derivatives rules that are created by HR 1256 
     would undercut the U.S. government before negotiations are 
     even begun. They create numerous additional opportunities for 
     Wall Street to undermine effective regulation.

[[Page 8759]]

       Second, HR 1256 strips the CFTC of authority to 
     independently determine derivatives rules for overseas 
     transactions. It requires any such rules to be passed by a 
     joint rulemaking between the SEC and CFTC, which must specify 
     identical rules. The SEC regulates less than 10 percent of 
     the gross notional swaps market, and has jurisdiction over 
     different types of swaps than the CFTC does. Furthermore, the 
     agencies are already required to harmonize their regulation 
     where appropriate. A joint rulemaking is not needed for 
     coordination, as the agencies regulate different derivatives 
     markets. But it would hinder and delay the CFTC's work to 
     regulate extraterritorial derivatives transactions. The 
     purpose of this joint rulemaking requirement is simply to add 
     more hurdles and more delay before any action can be taken, 
     making effective regulation less likely.
       In addition to the impact of additional bureaucratic 
     hurdles, in this case a joint rulemaking requirement would 
     also represent a dramatic roll back of the statutory mandate 
     granted to the CFTC in overseeing 90% of the swaps market. 
     Section 722(d) of the Dodd-Frank Act grants the CFTC 
     jurisdiction over all activities that have a ``direct and 
     significant connection with activities in, or effect on, 
     commerce of the United States''. This is clearly the 
     appropriate jurisdiction to protect U.S. taxpayers and the 
     U.S. economy--it is obviously critical that U.S. regulators 
     have jurisdiction over potentially risky transactions that 
     are directly connected to the U.S. economy. Yet the SEC has 
     no such clear statement of jurisdiction in the Dodd-Frank 
     Act. The effect of requiring joint rulemaking would be to 
     eliminate the CFTC's clear grant of jurisdiction over those 
     transactions that are directly connected to U.S. commerce.
       This long and complex legislation raises other issues as 
     well. However, the core issue is that oversight of swaps 
     transactions in foreign subsidiaries of U.S. banks is not a 
     side issue in derivatives regulation. It is at the heart of 
     effective oversight of these vast and complex markets. The 
     thousands of subsidiaries of major global banks allow them to 
     transmit cash flows and risk from derivatives contracts 
     around the world with unprecedented ease. If derivatives 
     transactions impacting the U.S. market that are conducted 
     through foreign subsidiaries are not properly regulated, then 
     no regulation of U.S. derivatives markets can be effective. 
     The numerous additional statutory restrictions created by HR 
     1256 to block U.S. oversight of derivatives transactions 
     conducted overseas would undermine derivatives regulation as 
     a whole and weaken protections against financial instability.
       Thank you for your consideration. For more information 
     please contact AFR's Policy Director, Marcus Stanley at 
     [email protected] or 202-466-3672.
           Sincerely,
                                   Americans for Financial Reform:
         AARP; A New Way Forward; AFL-CIO; AFSCME; Alliance For 
           Justice; American Income Life Insurance; American 
           Sustainable Business Council; Americans for Democratic 
           Action, Inc; Americans United for Change; Campaign for 
           America's Future; Campaign Money; Center for Digital 
           Democracy; Center for Economic and Policy Research; 
           Center for Economic Progress; Center for Media and 
           Democracy; Center for Responsible Lending; Center for 
           Justice and Democracy; Center of Concern; Center for 
           Effective Government; Change to Win; Clean Yield Asset 
           Management; Coastal Enterprises Inc.; Color of Change.
         Common Cause; Communications Workers of America; 
           Community Development Transportation Lending Services; 
           Consumer Action; Consumer Association Council; 
           Consumers for Auto Safety and Reliability; Consumer 
           Federation of America; Consumer Watchdog; Consumers 
           Union; Corporation for Enterprise Development; CREDO 
           Mobile; CTW Investment Group; Demos; Economic Policy 
           Institute; Essential Action; Green America; Greenlining 
           Institute; Good Business International; HNMA Funding 
           Company; Home Actions; Housing Counseling Services; 
           Home Defender's League; Information Press; Institute 
           for Global Communications.
         Institute for Policy Studies: Global Economy Project; 
           International Brotherhood of Teamsters; Institute of 
           Women's Policy Research; Krull & Company; Laborers' 
           International Union of North America; Lawyers' 
           Committee for Civil Rights Under Law; Main Street 
           Alliance; Move On; NAACP; NASCAT; National Association 
           of Consumer Advocates; National Association of 
           Neighborhoods; National Community Reinvestment 
           Coalition; National Consumer Law Center (on behalf of 
           its low-income clients); National Consumers League; 
           National Council of La Raza; National Council of 
           Women's Organizations; National Fair Housing Alliance; 
           National Federation of Community Development Credit 
           Unions; National Housing Resource Center; National 
           Housing Trust; National Housing Trust Community 
           Development Fund; National NeighborWorks Association; 
           National Nurses United; National People's Action; 
           National Urban League.
         Next Step; OpenTheGovernment.org; Opportunity Finance 
           Network; Partners for the Common Good; PICO National 
           Network; Progress Now Action; Progressive States 
           Network; Poverty and Race Research Action Council; 
           Public Citizen; Sargent Shriver Center on Poverty Law; 
           SEIU; State Voices; Taxpayer's for Common Sense; The 
           Association for Housing and Neighborhood Development; 
           The Fuel Savers Club; The Leadership Conference on 
           Civil and Human Rights; The Seminal; TICAS; U.S. Public 
           Interest Research Group.
         UNITE HERE; United Food and Commercial Workers; United 
           States Student Association; USAction; Veris Wealth 
           Partners; Western States Center; We the People Now; 
           Woodstock Institute; World Privacy Forum; UNET; Union 
           Plus; Unitarian Universalist for a Just Economic 
           Community.
       List of State and Local Partners:
         Alaska PIRG; Arizona PIRG; Arizona Advocacy Network; 
           Arizonans For Responsible Lending; Association for 
           Neighborhood and Housing Development NY; Audubon 
           Partnership for Economic Development LDC, New York NY; 
           BAC Funding Consortium Inc., Miami FL; Beech Capital 
           Venture Corporation, Philadelphia PA; California PIRG; 
           California Reinvestment Coalition; Century Housing 
           Corporation, Culver City CA; CHANGER NY; Chautauqua 
           Home Rehabilitation and Improvement Corporation (NY); 
           Chicago Community Loan Fund, Chicago IL; Chicago 
           Community Ventures, Chicago IL.
         Chicago Consumer Coalition; Citizen Potawatomi CDC, 
           Shawnee OK; Colorado PIRG; Coalition on Homeless 
           Housing in Ohio; Community Capital Fund, Bridgeport CT; 
           Community Capital of Maryland, Baltimore MD; Community 
           Development Financial Institution of the Tohono O'odham 
           Nation, Sells AZ; Community Redevelopment Loan and 
           Investment Fund, Atlanta GA; Community Reinvestment 
           Association of North Carolina; Community Resource 
           Group, Fayetteville A; Connecticut PIRG; Consumer 
           Assistance Council; Cooper Square Committee (NYC); 
           Cooperative Fund of New England, Wilmington NC; 
           Corporacion de Desarrollo Economico de Ceiba, Ceiba PR; 
           Delta Foundation, Inc., Greenville MS; Economic 
           Opportunity Fund (EOF), Philadelphia PA; Empire Justice 
           Center NY; Empowering and Strengthening Ohio's People 
           (ESOP), Cleveland OH; Enterprises, Inc., Berea KY; Fair 
           Housing Contact Service OH; Federation of Appalachian 
           Housing; Fitness and Praise Youth Development, Inc., 
           Baton Rouge LA; Florida Consumer Action Network; 
           Florida PIRG; Funding Partners for Housing Solutions, 
           Ft. Collins CO.;
         Georgia PIRG; Grow Iowa Foundation, Greenfield IA; 
           Homewise, Inc., Santa Fe NM; Idaho Nevada CDFI, 
           Pocatello ID; Idaho Chapter, National Association of 
           Social Workers; Illinois PIRG; Impact Capital, Seattle 
           WA; Indiana PIRG; Iowa PIRG; Iowa Citizens for 
           Community Improvement; JobStart Chautauqua, Inc., 
           Mayville NY; La Casa Federal Credit Union, Newark NJ; 
           Low Income Investment Fund, San Francisco CA; Long 
           Island Housing Services NY; MaineStream Finance, Bangor 
           ME; Maryland PIRG; Massachusetts Consumers' Coalition; 
           MASSPIRG; Massachusetts Fair Housing Center; Michigan 
           PIRG; Midland Community Development Corporation, 
           Midland TX; Midwest Minnesota Community Development 
           Corporation, Detroit Lakes MN; Mile High Community Loan 
           Fund, Denver CO; Missouri PIRG; Mortgage Recovery 
           Service Center of L.A.; Montana Community Development 
           Corporation, Missoula MT.;
         Montana PIRG; Neighborhood Economic Development Advocacy 
           Project; New Hampshire PIRG; New Jersey Community 
           Capital, Trenton NJ; New Jersey Citizen Action; New 
           Jersey PIRG; New Mexico PIRG; New York PIRG; New York 
           City Aids Housing Network; New Yorkers for Responsible 
           Lending; NOAH Community Development Fund, Inc., Boston 
           MA; Nonprofit Finance Fund, New York NY; Nonprofits 
           Assistance Fund, Minneapolis M; North Carolina PIRG; 
           Northside Community Development Fund, Pittsburgh PA; 
           Ohio Capital Corporation for Housing, Columbus OH; Ohio 
           PIRG; OligarchyUSA; Oregon State PIRG; Our Oregon; 
           PennPIRG; Piedmont Housing Alliance, Charlottesville 
           VA; Michigan PIRG; Rocky Mountain Peace and Justice 
           Center, CO; Rhode Island PIRG; Rural Community 
           Assistance Corporation, West Sacramento CA; Rural 
           Organizing Project OR; San Francisco Municipal 
           Transportation Authority; Seattle Economic Development 
           Fund;

[[Page 8760]]

           Community Capital Development; TexPIRG; The Fair 
           Housing Council of Central New York; The Loan Fund, 
           Albuquerque NM; Third Reconstruction Institute NC; 
           Vermont PIRG; Village Capital Corporation, Cleveland 
           OH; Virginia Citizens Consumer Council; Virginia 
           Poverty Law Center; War on Poverty--Florida; WashPIRG; 
           Westchester Residential Opportunities Inc.; Wigamig 
           Owners Loan Fund, Inc., Lac du Flambeau WI; WISPIRG.;
       Small Businesses
         Blu; Bowden-Gill Environmental; Community MedPAC; 
           Diversified Environmental Planning; Hayden & Craig, 
           PLLC; Mid City Animal Hospital, Phoenix AZ; The 
           Holographic Repatterning Institute at Austin; UNET.
                                  ____


                   Statement of Administration Policy


               H.R. 1256--Swap Jurisdiction Certainty Act

         (Rep. Garrett, R-NJ, and 3 cosponsors, June 11, 2013)

       The Administration is firmly committed to strengthening the 
     Nation's financial system through the implementation of key 
     reforms to derivatives markets. However, the Administration 
     opposes passage of H.R. 1256, which would modify Title VII of 
     the Dodd-Frank Wall Street Reform and Consumer Protection 
     Act. The Dodd-Frank Act puts in place a number of 
     requirements that bring transparency to and enhance the 
     stability of derivatives markets. These reforms will 
     collectively strengthen the weak and outdated regulatory 
     regime that played a significant role in the crisis that 
     caused devastating damage to the U.S. economy and the 
     financial well-being of American families.
       Regulators are making significant progress with a number of 
     derivatives-related reforms. As part of these efforts, 
     regulators are already coordinating to address the issues 
     raised in H.R. 1256, while taking into account the 
     characteristics of the particular markets they regulate. 
     Given these ongoing coordination efforts, passage of this 
     bill would be premature and disruptive to the current and 
     ongoing implementation of the reforms. The Administration 
     believes regulators should be given the time necessary to 
     complete their work. The Administration consequently opposes 
     passage of H.R. 1256, which would preempt ongoing work and 
     slow the implementation of these vital reforms.

  Ms. WATERS. I yield 2 minutes to the gentlewoman from New York (Mrs. 
Carolyn B. Maloney).
  Mrs. CAROLYN B. MALONEY of New York. I thank the gentlelady for 
yielding and for her leadership.
  Mr. Speaker, I rise today in opposition to H.R. 1256, the Swap 
Jurisdiction Certainty Act.
  I oppose this bill, as does the Obama administration, because it 
would fundamentally undermine Dodd-Frank's derivatives reforms and 
would create a loophole big enough to drive an AIG-sized truck through.
  Many of the derivatives that brought down AIG in 2008 were executed 
through one of its foreign branches, and many of the counterparties on 
those derivatives were European banks. These derivatives were a big 
factor in the AIG bailout that cost our taxpayers $182 billion and in 
the financial crisis that cost our economy well over $12 trillion.
  H.R. 1256 would require the CFTC and the SEC to issue a joint rule 
detailing how U.S. derivatives rules would apply to transactions 
between U.S. and foreign companies or individuals. However, the bill 
then requires the agencies to exempt foreign companies from U.S. rules 
unless both agencies determine that the derivatives rules in the 
foreign country are broadly equivalent to U.S. rules, a vague standard 
that would weaken both the CFTC and the SEC's proposed rules governing 
crossborder transactions.
  In the modern financial system, risk knows no borders. Problems in a 
U.S. bank's foreign office flow right back to the parent company here 
in the U.S., and it is the U.S. parent company that ultimately bears 
the loss. This is especially true in derivatives, which are traded in a 
global and highly interconnected market. For these regulations to be 
truly effective, however, they must cover derivatives executed in the 
foreign branches and guaranteed affiliates of U.S. banks.
  I urge my colleagues to vote against this bill.
  Mr. Speaker, I rise today in opposition to H.R. 1256, the Swap 
Jurisdiction Certainty Act.
  I oppose this bill and the Obama Administration opposes because it 
would fundamentally undermine Dodd-Frank's derivatives reforms, and 
would create a loophole big enough to drive an AIG-sized truck through.
  Many of the derivatives that brought down AIG in 2008 were executed 
through one of its foreign branches, and many of the counterparties on 
those derivatives were European banks. These derivatives were a big 
factor in the AIG bailout that cost taxpayers $182 billion, and in the 
financial crisis that cost our economy over $12 trillion. Why would we 
want to repeat the same mistake?
  H.R. 1256 would require the CFTC and the SEC to issue a joint rule 
detailing how U.S. derivatives rules would apply to transactions 
between U.S. and foreign companies or individuals. However, the bill 
then requires the agencies to exempt foreign companies from U.S. rules 
unless both agencies determine that the derivatives rules in the 
foreign country are ``broadly equivalent'' to U.S. rules--a vague 
standard that would weaken both the CFTC and the SEC's proposed rules 
governing cross-border transactions.
  In the modern financial system, risk knows no borders. Problems in a 
U.S. bank's foreign office flow right back to the parent company here 
in the U.S., and it is the U.S. parent company that ultimately bears 
the loss. This is especially true for derivatives, which are traded in 
a global and highly interconnected market.
  For these regulations to be truly effective, however, they must cover 
derivatives executed in the overseas branches and guaranteed affiliates 
of U.S. banks. This is what the CFTC has proposed, and what the 
supporters of this bill are seeking to prevent.
  We cannot afford to outsource derivatives regulation to foreign 
jurisdictions when it is U.S. taxpayers, and not the taxpayers of the 
foreign jurisdiction, who are ultimately bearing the risks. We learned 
the hard way with AIG that risk in the derivatives market flows across 
borders. Why would we want to repeat the same mistake?
  In response to the financial crisis, Congress enacted Dodd-Frank, 
which imposes common-sense rules on the derivatives market, such as 
capital and margin requirements for U.S. derivatives dealers. These 
rules will make the financial system safer by ensuring that U.S. banks 
that deal derivatives are sufficiently capitalized, and have the 
ability to pay off all of their derivatives without government help.
  H.R. 1256 would undermine these basic reforms. This is why I oppose 
the bill, why the Obama administration opposes the bill, and I would 
urge my colleagues to vote against the bill.
  Mr. HENSARLING. Mr. Speaker, I yield 2 minutes to the gentleman from 
Texas (Mr. Neugebauer), chairman of the Housing and Insurance 
Subcommittee.
  Mr. NEUGEBAUER. Mr. Speaker, I rise in support of H.R. 1256.
  One of the things that I think people demand out of their government 
is transparency and regular order, and one of the things about this 
bill is there has been a lot of transparency and a lot of debate and 
discussion about it.
  In fact, this bill was marked up in the previous Congress, both in 
the House Agriculture Committee and the House Financial Services 
Committee. You would have thought we would have just brought that bill 
back here and put it on suspension. That's not what's happening. It was 
sent back to the House Financial Services Committee and the House 
Agriculture Committee.
  In fact, during that process in the Financial Services Committee, 
some issues that Mr. Frank, the ranking member of last year, brought up 
were incorporated into this markup. When it was over in the House 
Agriculture Committee--and I have the opportunity to sit on both of 
those committees--some changes that were recommended by the ranking 
member, Collin Peterson, were incorporated into that bill. In fact, 
that bill passed on voice vote in the House Agriculture Committee.
  Mr. Kildee offered some language that would limit the bill to the 
nine largest swap jurisdictions as was alluded to earlier. Those were 
incorporated into this bill.
  The ranking member of the full committee did bring up an amendment, 
and interestingly enough some of her own Members did not support that 
amendment.
  So what I would say about H.R. 1256 is that it's going to bring some 
certainty to a very uncertain process. The fact that it has been 3 
years and these two agencies have not been able to come together and 
come out with a common rule doesn't make sense. I think it's one of the 
things that frustrates people about government, that

[[Page 8761]]

two different agencies would have different rules about the same thing.
  Then I think the third thing, too, as was alluded to by the chairman, 
is that these are important markets to our businesses, whether they be 
large or small. They rely on foreign participants to come into the 
markets and provide opportunities to hedge, whether it's crops or 
ingredients in the manufacturing process.
  Basically, what we're doing is we're saying that the SEC and the CFTC 
still have the authority that was given to them in the original Dodd-
Frank bill, but we need some harmonization not only within those 
agencies, but with the other countries that are involved in regulating 
the foreign entities, as well.
  Ms. WATERS. Mr. Speaker, I will enter into the Record the amendment 
that I would have offered had they not come up with a closed rule.

       Page 5, strike line 1 and all that follows through page 7, 
     line 6, and insert the following:
       (d) General Application to Foreign Jurisdictions.--
       (1) General application.--In issuing rules under subsection 
     (b), the Commissions shall provide that persons in compliance 
     with the regulatory requirements of a country or 
     administrative region that has one of the nine largest 
     combined swap and security-based swap markets by notional 
     amount in the calendar year preceding issuance of such rules 
     or any other foreign jurisdiction as jointly determined by 
     the Commissions may satisfy the corresponding categories of 
     United States swaps requirements through such compliance upon 
     the making of a joint determination by the Commissions 
     pursuant to subsection (d)(2).
       (2) Determinations.--The Commissions shall jointly 
     determine whether one or more categories of regulatory 
     requirements of a foreign jurisdiction as jointly determined 
     by the Commissions, are broadly equivalent to corresponding 
     United States swaps requirements, with such determinations 
     initially to be made as follows:
       (A) Initial determinations regarding a country or 
     administrative region described under paragraph (1), or any 
     other foreign jurisdiction as jointly determined by the 
     Commissions, accounting for the five largest combined swap 
     and security-based swap markets by notional amount in the 
     calendar year preceding issuance of rules under subsection 
     (b) shall be made within 180 days after issuance of such 
     rules.
       (B) Initial determinations regarding a country or 
     administrative region described under paragraph (1), or any 
     other foreign jurisdiction as jointly determined by the 
     Commissions, accounting for the next five largest combined 
     swap and security-based swap markets by notional amount in 
     the calendar year preceding issuance of rules under 
     subsection (b) shall be made within 360 days after issuance 
     of such rules.
       (C) Initial determinations regarding a country or 
     administrative region described under paragraph (1), or any 
     other foreign jurisdiction as jointly determined by the 
     Commissions, shall be made within 540 days after issuance of 
     rules under subsection (b).
       (3) Criteria.--In such rules, the Commissions shall jointly 
     establish criteria for determining that one or more 
     categories of regulatory requirements of a country or 
     administrative region described under paragraph (1) or other 
     foreign jurisdiction are broadly equivalent to corresponding 
     United States swaps requirements, and shall jointly determine 
     the appropriate application of certain United States swap 
     requirements to persons or transactions relating to or 
     involving such country or administrative region or other 
     foreign jurisdiction as jointly determined by the Commission 
     to the extent that the Commissions have determined that 
     certain regulatory requirements of such country or 
     administrative region or other foreign jurisdiction are 
     broadly equivalent to corresponding United States swaps 
     requirements.
       (4) Right to petition.--A market participant or group of 
     market participants may request a determination with respect 
     to a particular category or categories of foreign regulatory 
     requirements with regard to a foreign jurisdiction or 
     jurisdictions. Any determination made regarding such a 
     request shall be available to all market participants.
       Page 7, line 7, strike ``(4)'' and insert ``(5)''.

  Ms. WATERS. I yield 1\1/2\ minutes to the gentleman from 
Massachusetts (Mr. Capuano).
  Mr. CAPUANO. Mr. Speaker, I thank the gentlewoman for yielding.
  Look, this bill is not going to create jobs in America. This bill is 
all about foreign swaps. If we're going to create jobs, we're going to 
create them in foreign countries.
  By the way, Dodd-Frank exempts foreign swaps activities from 
derivatives regs, except when they have--and this is a quote from the 
bill--``direct and significant connection with activities in, or effect 
on, commerce of the United States.''
  Other than that, if they don't affect us; they're not subject to 
regulation. Simple. But if they're done in a foreign country and they 
affect us, if it's just a way to get around our regs, they're subject 
to United States regulation. It's really kind of simple.
  By the way, according to The Wall Street Journal, the sixth largest 
banks of the United States combined have 22,621 subsidiaries. That's an 
average of 3,770 subsidiaries each. Why? In order to get around this 
kind of regulation.
  I don't blame them. I'm not against swaps. I'm not against swaps 
conducted on foreign soil. I simply want them subjected to United 
States regulation. I don't think it's that difficult. I don't 
understand why we have to do this, except to say, Here's a big open 
door. This is a huge hole to the regulatory process of the United 
States of America.
  I understand that some Members of this body don't like any 
regulation, and I respect that. But get up and say it.
  Mr. HENSARLING. Mr. Speaker, may I inquire as to how much time 
remains on both sides.
  The SPEAKER pro tempore. The gentleman from Texas has 3\1/4\ minutes 
remaining, and the gentlewoman from California has 12 minutes 
remaining.
  Mr. HENSARLING. At this time, Mr. Speaker, I yield 2 minutes to the 
gentleman from Florida (Mr. Crenshaw).

                              {time}  1600

  Mr. CRENSHAW. Mr. Speaker, I thank the gentleman for yielding.
  This seems to be one of the most straightforward, commonsense pieces 
of legislation that I have seen in a long time.
  As chairman of the subcommittee on Appropriations that overseas the 
budget of the SEC, we have hearings from time to time to make sure that 
the SEC is doing their job--that is to protect investors, to make sure 
that capital markets are fair and stable. Here we have a situation 
where a certain amount of instability has been created because you have 
two different agencies that are writing different rules about what's 
called the over-the-counter commodities market. That's a global market, 
and it is very important to an awful lot of people. It seems to me that 
if we're going to have that kind of regulation, you would think that 
the SEC would coordinate with the other agency, the Commodity Futures 
Trading Commission, and they would publish one rule that people can 
understand and live by. But that's not the case.
  You don't have the similarities that you need; you don't have them 
mirroring each other. All this bill does is simply say: Look, if we're 
going to ask for this kind of regulation, let's make sure that these 
two agencies publish the same rule. Otherwise you've got all kinds of 
uncertainty, all kinds of turmoil. If you're a regulated individual or 
entity or company, how do you know what to comply with unless this 
happens?
  Now, I don't want to have to put language in the appropriations bill 
that kind of encourages folks to do that. It's simple, just pass this 
bill. It sounds to me like we're going to. It's a bipartisan bill, and 
I encourage everyone to vote ``yes'' and move on.
  Ms. WATERS. I yield 1\1/2\ minutes to the gentleman from 
Massachusetts (Mr. Lynch).
  Mr. LYNCH. Mr. Speaker, I thank the gentlelady for yielding.
  I rise today in strong opposition to the bill before this House 
today, H.R. 1256, the Swaps Jurisdiction Certainty Act. It should be 
called the Wall Street Bailout Certainty Act because that's the actual 
effect this is going to have. It will do serious and irrevocable harm 
to our efforts to rein in the reckless behavior of Wall Street.
  In the words of our own Commodity Futures Trading Commission Chairman 
Gary Gensler, this bill will ``blow a hole'' in the hard-fought 
derivatives reforms we passed 3 years ago. Section 722 of the Dodd-
Frank Act gives the CFTC authority to regulate overseas derivatives 
that have a direct and significant effect on the commerce of the United 
States.

[[Page 8762]]

  If my colleagues need an example, I harken to the ranking member's 
example of why this cross-border authority is so critically important, 
and that's the case of AIG, the insurance giant. AIG engaged in 
increasingly complex and risky derivatives bets on the subprime 
mortgage market out of its AIG Financial Products subsidiary in London. 
And because there was virtually no oversight of derivatives markets, 
AIG Financial Products was able to deal in the shadows. And when the 
housing bubble burst, no one, not its directors, not its 
counterparties, not even its regulators, knew just how deeply in 
trouble AIG was.
  So while we have adopted a number of regulations within Dodd-Frank, 
this bill will allow all of the companies that would be regulated to 
escape that regulation by doing these derivative deals through their 
foreign subsidiaries. And the four biggest derivative dealers in this 
country have over 3,000 foreign subsidiaries each. So this is an escape 
hatch for them. Vote ``no'' on this bill.
  Mr. HENSARLING. I reserve the balance of my time.
  Ms. WATERS. I yield 1\1/2\ minutes to the gentleman from Texas (Mr. 
Al Green).
  Mr. AL GREEN of Texas. Mr. Speaker, the question before us is whether 
we will outsource American economic stability in this quadrillion-
dollar derivatives market to foreign subsidiaries of American 
companies. Will we outsource this quadrillion-dollar market?
  Now, a quadrillion is a big number. If you stack dollar bills one on 
the other, a quadrillion will take you all of the way from the Earth to 
the Sun. It's important for us to remember that AIG outsourced to a 
foreign subsidiary. It was in London. And, of course, we know what 
happened with AIG.
  Finally, I will say this. We're trying to jump-start the economy, it 
seems. We have to be careful what we do when we try these jump starts 
because this derivatives market has within it interest rate 
derivatives. These derivatives, if there's a spike in interest rates, 
can have an enormous impact on the world's economy.
  So let us be careful when we jump-start. Sometimes when we do common 
things, like jump-starting our cars, it works fine. But on other 
occasions, we can have an explosion. Let's be careful as we jump-start 
the derivatives market.
  Mr. HENSARLING. I continue to reserve the balance of my time.
  Ms. WATERS. I yield 1\1/2\ minutes to the gentleman from Minnesota 
(Mr. Ellison).
  Mr. ELLISON. Mr. Speaker, I will get right to the point: AIG, 
Citibank, and Lehman are recent examples of institutions where the U.S. 
parent was hurt by those firms' problems abroad. Lehman had 3,300 
subsidiaries at the time they declared bankruptcy, and its London 
subsidiary had more than 130,000 outstanding swaps contracts, many of 
them guaranteed by Lehman Brothers Holdings, headquartered in the U.S.
  Bank of America, for example, has more than 2,000 subsidiaries, with 
38 percent of them in foreign jurisdictions. Bank of America books its 
derivatives not only in the U.S. but also in the U.K. and in Ireland.
  Now, a very simple fact, Mr. Speaker, is that Dodd-Frank, the bill 
that has been deconstructed before our very eyes, while the ink is 
still wet on the page, requires that all foreign or U.S. firms 
transacting with U.S. persons comply with derivatives market reform. 
We're taking that apart right now. That's a shame, and it's going to 
put that guy who wants to buy beer in Texas at risk for his job and his 
house and everything else.
  Mr. HENSARLING. I reserve the balance of my time.
  Ms. WATERS. I yield 1\1/2\ minutes to the gentlewoman from 
Connecticut (Ms. DeLauro).
  Ms. DeLAURO. I stand in strong opposition to this bill, which weakens 
Dodd-Frank regulations over derivatives markets and allows foreign 
banks and swaps traders to engage in the same risky behavior that 
caused an economic meltdown a few short years ago.
  We are here to represent the American people, not the big banks. And 
after the 2008 financial crisis that triggered the worse recession 
since the Great Depression, the American people want to see more 
accountability from Wall Street, not less. That's why we passed Dodd-
Frank in the first place, to end dangerous speculation by financial 
institutions and prevent more bailouts.
  The bill before us tries to exempt from oversight any swap 
transaction in which one of the parties is not based in the United 
States. In other words, it effectively guts the derivatives regulation 
in the Dodd-Frank Act.
  When AIG nearly destroyed the economy, their affiliate was based out 
of London as a branch of a French-registered bank. Lehman Brothers had 
3,300 legal entities here and abroad when it failed. Citigroup set up 
numerous structured investment vehicles overseas to move positions off 
its balance sheet. But when those investments were about to fail, 
Citigroup in the U.S. assumed the huge debt, and was ultimately bailed 
out by U.S. taxpayers.
  The notion that we should let big banks evade Dodd-Frank oversight if 
they set up a subsidiary in another major economy first is absurd. A 
vote for this bill is a vote for more risky derivatives transactions, 
more bad behavior, and more bailouts. I urge my colleagues to stand up 
for the American people, the American taxpayers, and vote this down.
  Mr. HENSARLING. I reserve the balance of my time.
  Ms. WATERS. I yield an additional 1 minute to the gentleman from 
Massachusetts (Mr. Capuano).
  Mr. CAPUANO. What this bill says is if you do this activity in the 
United States of America, you'll be subject to certain regulations. If 
you do the exact same activity through a subsidiary in a foreign 
country, you will not be subject to our regulation. That's an open 
invitation to move American jobs offshore. It's an encouragement to 
move American jobs offshore. It is blatantly obvious. How that is good 
for the American economy, I don't know. Why would we want to say to any 
American company some foreign regulator is better than us?
  Now I know we are going to have this debate in other matters later on 
this week, saying just the opposite. So in this case, foreign 
regulators are better, but in other cases, they're not. It's kind of 
stunning. We actually did it this morning on another matter.
  I want to join with the AFL-CIO in making a pretty clear warning to 
my colleagues: if this bill becomes law, I regretfully agree that there 
will come a day that you'll regret this vote, as many of us, not me, 
but many of us regret the vote for the PATRIOT Act.

                              {time}  1610

  Ms. WATERS. I yield 1 minute to the gentleman from Massachusetts (Mr. 
Lynch.)
  Mr. LYNCH. Mr. Speaker, I thank the gentlelady for yielding.
  Let me just make one final point on this. What this bill will do now 
is to give the Cayman Islands or London or some other jurisdiction the 
ability to write derivatives rules that cover U.S. affiliates.
  Now, the problem with that very idea is that the Cayman Islands or 
any other jurisdiction has no interest in protecting the U.S. taxpayer. 
That's the truth.
  When the bailout for AIG came, it was $160 billion in U.S. currency, 
supported by the U.S. taxpayer, that bailed AIG out. So any of these 
foreign affiliates that go under in foreign jurisdictions, those 
foreign jurisdictions, whether it be the Cayman Islands or any other 
jurisdiction, have no interest, they have no dog in the fight to 
protect the American taxpayer.
  That's the problem with this bill. That's the bottom line. We should 
vote against it. This is a disgrace. But it does show the power of Wall 
Street, I'll say that.
  Mr. HENSARLING. I yield myself 15 seconds, Mr. Speaker, to say, one, 
if this is a disgrace, you need to inform almost two-thirds of your 
Members who voted for it in committee. Second of all, nothing in this 
amends Dodd-Frank. Third of all, you all tell us Dodd-Frank ended ``too 
big to fail,'' so

[[Page 8763]]

the specter of bailout I simply do not understand. You need to make up 
your mind.
  I reserve the balance of my time.
  Ms. WATERS. I yield myself as much time as I may consume to refute.
  The gentleman from Texas keeps talking about we make the claim that 
we ended ``too big to fail.'' That's what we're trying to do. That's 
what we're standing up against, what you're attempting to do in this 
piece of legislation.
  Derivatives are an important part of the reform of Dodd-Frank. It is 
important because we're trying to create transparency. The over-the-
counter derivatives market that has been working for so long in the 
shadows we cannot continue to have.
  Mr. HENSARLING. Will the gentlewoman yield?
  Ms. WATERS. I yield to the gentleman from Texas.
  Mr. HENSARLING. If I misquoted the gentlelady, I apologize, but I 
thought I had seen earlier quotes where the gentlelady posited that 
Dodd-Frank ended ``too big to fail.'' If I was incorrect, I apologize 
to the gentlelady, but I thought you had said that on more than one 
occasion.
  Ms. WATERS. Reclaiming my time, the gentleman from Texas knows how it 
works. We have Dodd-Frank reform, and it has to be implemented. You 
know the living wills have to be done. You know that we have to put in 
place all that it takes to have the orderly liquidation procedure. And 
it is important that you understand, and that all of our Members 
understand, that derivatives are an important part of reform.
  If we allow this bill that presumes that other countries are 
comparable to us in their regulatory regimes without even checking, 
without vetting, without asking any questions, without requiring 
anything, then we absolutely put our own country at risk, and we put at 
risk the American taxpayers who will have to bail out the major 
financial institutions if we allow you to pass a bill like this, 
presuming that they are okay, that these countries are okay.
  The other thing is--I know and understand now. I understand very well 
that if we allow this presumption to take place, then you'll just go to 
court and you'll argue that you have the presumption, and you'll try 
and tie up the CFTC all over again.
  I reserve the balance of my time.
  Mr. HENSARLING. I reserve the balance of my time.
  Ms. WATERS. I yield 1 minute to the gentleman from Texas (Mr. Al 
Green).
  Mr. AL GREEN of Texas. Thank you, Madam Ranking Member.
  It's important to note the amount in derivatives that we're talking 
about. We're talking about a quadrillion dollars--a quadrillion 
dollars--more than the entire economy of the world, a quadrillion 
dollars, and the impact a quadrillion dollars can have on the world's 
economy.
  Some of this money is in interest rate derivatives. If there's a 
spike in interest rates, we're not sure what the ultimate impact on the 
world's economy will be. If I am wrong, everything will be all right; 
but if I'm right, everything will be all wrong, and it will be too late 
for us to take corrective action.
  Mr. HENSARLING. I reserve the balance of my time.
  Ms. WATERS. I yield myself the balance of my time.
  Mr. Speaker and Members, I'm very disappointed and worried that this 
bill has been brought to the floor under a closed rule, as have more 
than one-third of the bills so far this Congress.
  I believe there are important issues concerning the structure of this 
bill, particularly the bill's presumption that the rules of the nine 
largest foreign markets will be broadly equivalent to our own. The bill 
would require the SEC and the CFTC to act in order to allow U.S. rules 
to apply to transactions, even though the risk of the transactions will 
ultimately be imported back to the United States.
  My amendment would have the reverse of this presumption, directing 
the SEC and CFTC to jointly consider the regulatory framework of these 
countries to provide appropriate exemptions when jurisdictions have 
derivatives rules that are truly broadly equivalent to our own.
  A closed rule prevents us from considering these issues. Why do they 
have a closed rule? Why did they try to hide this bill inside the DOD?
  They don't want this debate. They didn't want an opportunity for any 
amendments. They don't care that foreign countries would be determining 
our fate when they set up their regulatory regimes, which won't be 
comparable to ours.
  We owe it to the American people to do better than we have done. We 
have had the subprime meltdown. We've had the economic crisis. Why 
throw us back into that simply because you're trying to protect Wall 
Street?
  Our citizens don't deserve that. They deserve for us to stand up and 
protect them from having to bail out these big institutions that will 
fail.
  We have gone through AIG. We have gone through JP Morgan, the London 
Whale, the $6 billion failure. Why should we do that again?
  I yield back the balance of my time.
  Mr. HENSARLING. Mr. Speaker, how much time do we have?
  The SPEAKER pro tempore (Mr. Womack). The gentleman from Texas is 
advised that he has 1\1/2\ minutes remaining.
  Mr. HENSARLING. Mr. Speaker, in order to close for the bipartisan 
majority, I will yield the remainder of our time to the author of the 
bill, the gentleman from New Jersey (Mr. Garrett).
  Mr. GARRETT. I thank the gentleman from Texas, and the bipartisan 
manner from Mr. Carney and Mr. Scott as well, working together to get 
this bill passed.
  And I am welcome to the debate that we are having here, but I do find 
it amazingly ironic that I have to come to the floor and stand here in 
the position of former Member Barney Frank and defend Dodd-Frank to the 
allegations from the other side of the aisle to the idea that there's 
some sort of escape hatch here, or a pole blown out, or that we're 
outsourcing regulation, when, in fact, if you read the legislation, 
you'll realize it does none of those things.
  Now, I understand that Dodd-Frank was a piece of legislation that was 
well over 2,000 pages, and maybe some who voted in favor of it did not 
understand the complexity of it and what was involved; but the bill 
before us today is only 11 pages long, so everyone should be able to 
have read it and understand it.
  So when the gentleman from Massachusetts refers to section 722(d) 
being affected by it and other portions of Dodd-Frank being changed by 
it, he should understand, by reading the 11 pages, none of Dodd-Frank 
or 722 or those other sections were altered in one way, shape, or form 
or other.
  What was done was to install and enforce and carry out the will of 
Dodd-Frank in the area to make sure that the two regulatory agencies 
dealing with the respective areas here, the SEC and the CFTC, actually 
do what former Chairman Frank wanted Dodd-Frank to do, and that is to 
issue a rule and issue a rule that would be effective, in their 
judgement, for the betterment of the economy and for the regulated 
entities involved.
  And with that, I see my time is up. I encourage a ``yes'' vote on 
this legislation.

                              {time}  1620

  Mr. CONAWAY. Mr. Speaker, I yield myself as much time as I may 
consume.
  Mr. Speaker, I rise today to urge my colleagues to pass H.R. 1256, 
the Swap Jurisdiction Certainty Act. Swaps are important tools that our 
farmers, ranchers, and businesses rely on to hedge the risks of 
competing in a global marketplace. Yet later this month, guidance the 
CFTC issued could fundamentally disrupt these markets here at home and 
around the world unless Congress acts today.
  Last summer, the CFTC issued its proposed crossborder guidance to the 
marketplace for review and comment, explaining how it would regulate 
swaps entered into by foreign companies.

[[Page 8764]]

What was produced was startling in its reach--the guidance declares 
that almost any swap entered into by anyone with any interest related 
to the United States falls under the jurisdiction of the CFTC and the 
Dodd-Frank Act.
  As chairman of the General Farm Commodities and Risk Management 
Subcommittee, I held a hearing on this issue last December with 
Commissioners Sommers and Chilton from the CFTC and regulators from the 
European Union and Japan. Each witness agreed that it was imperative 
that we get the crossborder application of Dodd-Frank correct and that 
the U.S. not try to police swap markets around the world.
  Respect for equivalent, but not necessarily identical, regulatory 
standards has been a cornerstone of international banking regulations 
for decades. The CFTC as rewritten the principles of international 
cooperation with this guidance, insisting that it alone can and should 
manage the global swaps markets. Predictably, this was met with 
universal outcry from foreign governments and international regulators.
  But today's bill is about far more than just the pride of 
international regulators. If the CFTC's guidance stands and equivalence 
is no longer recognized, the global derivatives market can become 
regionalized as institutions and customers transact a majority of their 
business within their home jurisdictions. Such an outcome would 
concentrate specific risks in various economies and sectors of the 
world.
  Here at home, American end users who use swaps to manage everyday 
business risks may have fewer counterparties to work with. Fewer 
counterparties means that there will be less competition and liquidity 
in the market, leading to higher costs for end users and a 
concentration of higher risk in the United States.
  Not only has the CFTC failed to cooperate with international 
regulators, it's failed to do so at home, as well, leading the SEC to 
propose a separate rule governing the small slice of swaps markets that 
it regulates. Today, there are two different sets of rules for when 
market participants are subject to U.S. law, depending on what 
instrument is being traded.
  The Swap Jurisdiction Certainty Act will end this mess. It first 
requires that the CFTC and the SEC cooperate on a single, joint rule 
for the extraterritorial application of Dodd-Frank regulations. Second, 
it requires the CFTC and the SEC to recognize the competence of certain 
sophisticated foreign regulators, unless they can both agree that the 
regulators have failed to produce equivalent requirements.
  For all the back and forth today, this is a simple, straightforward 
bill. In a nutshell, it requires the CFTC and the SEC to cooperate, 
both with each other and with the rest of the world--exactly what they 
should have been doing all along.
  I'd like to thank my counterpart on the Financial Services Committee, 
Mr. Garrett, for his work on bringing this legislation to the floor 
today. I would, as well, like to thank Ranking Member David Scott, who 
continues to be a thoughtful and productive partner on issues in the 
Agriculture Committee. And, finally, I'd like to thank Chairman Frank 
Lucas who never lets us forget that our constituents depend on these 
markets to manage their businesses and protect themselves in an 
uncertain world.
  With that, I urge swift passage of the legislation and reserve the 
balance of my time.
  Mr. DAVID SCOTT of Georgia. Thank you, Mr. Chairman. I yield myself 
such time as I may consume.
  Let me say at the outset that what has been clearly brought to our 
attention today is a great need for leadership. That's what this is 
about. Derivatives are here. The other side pointed out very 
magnificently we're dealing with a $600 trillion piece of the world 
economy. It must have rules. It must have regulations. This is the duty 
and the responsibility of the United States Congress to do so. To do 
otherwise would indeed weaken Dodd-Frank. What this bill does is 
strengthen Dodd-Frank.
  Now, I serve on both the Agriculture Committee and the Financial 
Services Committee. I'm also the ranking member of the General Farm 
Commodity and Risk Management Subcommittee. I mention those things 
because I have been intimately involved in this issue for a long time, 
and I know the consequences if we do not respond.
  Now, why do we need this bill? Dodd-Frank has been approved almost 3 
years; but right today, we still do not know what swaps activities will 
be subject to U.S. regulation and which ones will be subject to foreign 
regulations. If something is shameful, that is shameful.
  In section 722, the Dodd-Frank Act limits the CFTC's jurisdiction 
over swaps transactions outside the United States for those that have 
``direct and significant connection with activities in or effect on 
commerce in the United States.'' However, section 722, the same 
section, limits the SEC's jurisdiction over security-backed swaps 
outside the United States, as well. That brings confusion.
  What is the proper thing to do? Ask these two agencies to harmonize. 
Give us one rule so that that will apply. That's what this bill does. 
We are dealing with a global market. We cannot put our American banking 
system at a disadvantage competitively. That is what will weaken Dodd-
Frank. That is what will bring about another crisis beyond what we 
already have.
  So, Mr. Speaker, what we need to do is understand that on the foreign 
market, what are we dealing with? We're not dealing with every nation 
in the world. We are dealing with only the nine largest economies, and 
we must make sure that their regulatory regimes are as strong as ours. 
That is the responsibility of the SEC and the CFTC. That's what this 
bill is.
  As far as AIG and as far as all of the other debacles that have 
happened, we're all upset about that. That's why we must move with this 
legislation.
  Now, very briefly, much has been said about what has happened as if 
we've done nothing about it. Mr. Speaker, we've put clearing in so that 
all swaps transactions must be cleared. Clearing of swap contracts will 
eliminate bilateral credit risk, and it transfers that risk to 
clearinghouses which requires market participants to post margins, put 
up their own money. That's how you prevent another calamity.
  The margin requirements are there also for uncleared swaps. And the 
clearing rules and the margin rules taken together mean that all swap 
contracts will be fully secured by high-quality liquid assets, and this 
is what will prevent another scenario.
  And so I started what I said with what is desperately needed here: 
leadership. To allow this crossborder to go unanswered any longer is 
weakening us. Mr. Gensler, who is the chairman of the CFTC, next week 
will be meeting in Montreal with the European regulators. Leadership is 
needed. There is a July 23 deadline that all of the international 
markets must meet to deal with rules and regulations.

                              {time}  1630

  The wrong thing for us to do is not to pass this bill. And I assure 
my colleagues, my Democratic and Republican friends, I've gone through 
the safeguards we've put in here. This will not happen again. It will 
not happen again because we have strengthened Dodd-Frank. And the head 
of our Fed, Chairman Bernanke, said in his own words, We need this 
cross-border protection; we need this legislation.
  So with that, I reserve the balance of my time because I have some 
other speakers that we'd like to hear from.
  Mr. CONAWAY. Mr. Speaker, I yield 2 minutes to a former member of the 
Agriculture Committee and the subcommittee, the gentleman from North 
Carolina (Mr. Hudson).
  Mr. HUDSON. Mr. Speaker, I rise today in strong support of H.R. 1256, 
the Swap Jurisdiction Certainty Act, which requires the CFTC and the 
SEC to cooperate on a single rule for how U.S. derivatives regulations 
are applied overseas.
  This bill and several others we will consider today are critically 
important to the work we have begun in the

[[Page 8765]]

House Agriculture Committee to reform Dodd-Frank and make this bill 
less onerous for our farmers and bankers.
  As Commissioner Jill Sommers noted, it appears as though the CFTC was 
``guided by what could only be called the `Intergalactic Commerce 
Clause''' as they prepared their cross-border guidance when it was 
released last summer.
  How foreign institutions comply with Dodd-Frank is of enormous 
consequence. The CFTC has taken the position that virtually everyone 
everywhere is a U.S. person and subject to its jurisdiction. Without 
question, this expansive claim of jurisdiction is going to raise the 
cost for farmers and end users in my home State of North Carolina to 
hedge their risk and diminish global competitiveness of our domestic 
financial firms, which employ many people back home in North Carolina.
  The CFTC is risking all this to an end that no one seems to fully 
understand. Their actions are making financial regulatory reform more 
burdensome and more complicated, while serving only to alienate the 
CFTC and U.S. markets from the rest of the world.
  The Swap Jurisdiction Certainty Act would force the CFTC to cooperate 
with the SEC on a single standard for cross-border application of swaps 
regulations. In addition, the bill is narrowly tailored to guarantee 
that the top nine foreign swaps markets will be recognized by the CFTC 
and SEC as having comparable rules so foreign firms would be governed 
by the laws of their home countries.
  This bill does not allow unchecked swaps markets to spring up in 
Caribbean island nations or the four corners of Southeast Asia, as some 
on the other side of the aisle have alluded. Instead, it directs the 
CFTC to do what it should have done in the first place: to cooperate 
with its fellow regulators both down the street and around the world.
  I urge its adoption.
  Mr. DAVID SCOTT of Georgia. I yield 1\1/2\ minutes to the gentleman 
from Delaware (Mr. Carney).
  Mr. CARNEY. I would like to thank Mr. Scott for yielding time and for 
his leadership on this issue.
  I rise today in support of H.R. 1256. It will lead to a stronger, 
more robust set of regulations for the derivatives market.
  Let me be clear, this is not an effort to roll back Title VII of 
Dodd-Frank or to weaken its reach overseas. In fact, its intent is to 
harmonize regulations for cross-border swaps transactions, to eliminate 
confusion, and to prevent the establishment of two sets of rules in 
certain jurisdictions, which we know will leave us vulnerable to 
companies who would want to exploit those loopholes. In fact, this is a 
goal that our former chair and ranking member articulated well in a 
letter that he cosigned with Senator Tim Johnson to the regulators 
dated October 4, 2011, in which he says:

       U.S. regulators should work with other international 
     regulators to seek broad harmonization of appropriately tough 
     and effective standards. Should current harmonization efforts 
     ultimately fail or prove a race to the bottom that would 
     undermine effective regulation, the U.S. would of course 
     reserve the right to proceed to extend the application of its 
     standards to overseas operations.

  That's exactly what this bill does: it calls on the CFTC and the SEC 
to issue joint regulations in overseas markets, and in the G8 plus Hong 
Kong, in those markets where there are already rigorous regulations, 
the CFTC to determine whether our regulations are strong enough. If 
they are not, they can apply our regulations there.
  So this bill is a good bill to create one set of regulations around 
the world that will be strong and clear and consistent.
  Mr. Speaker, I rise today to support H.R. 1256. It will lead to a 
stronger, more robust set of regulations for the derivatives market.
  Let me be clear, this is not an effort to roll back Title 7 of Dodd-
Frank or to weaken its reach overseas.
  In fact its intent is to harmonize regulations for cross-border swaps 
transactions.
  To eliminate confusion.
  And to prevent the establishment of two sets of rules in certain 
jurisdictions--which we know leaves us vulnerable to companies who want 
to exploit loopholes when there's a patchwork of regulations.
  Unfortunately, since the passage of Dodd-Frank, the CFTC and SEC have 
moved forward with conflicting proposals to enforce Dodd-Frank 
derivatives law in markets overseas.
  This bill has one goal: to create clear, strong and consistent rules 
governing derivatives transactions for U.S. companies operating around 
the world.
  It does this in two ways.
  First: it tells the SEC and CFTC to coordinate and issue their swaps 
regulations jointly. That way, we have one set of regulations that 
companies have to follow.
  Under current law, the two agencies can issue overlapping, or even 
conflicting regulations. In fact, that's exactly what they've done.
  This is confusing and burdensome for U.S. firms. But more 
importantly, it creates opportunities for firms to exploit 
inconsistencies and loopholes in the regulations.
  This bill requires one consistent set of regulations to close 
loopholes and eliminate confusion.
  Second: this bill acknowledges the strong regulatory commitment some 
nations have already made to regulate swaps.
  The bill says that since these countries are moving forward with 
derivatives regulations that are comparable to ours in scope and rigor, 
companies engaged in derivatives transactions in these countries can 
follow those regulations.
  During consideration of this bill in the Financial Services 
Committee, I supported an amendment offered by the Ranking Member that 
would have flipped the presumption in the bill.
  Instead of presuming that certain countries have broadly equivalent 
regulations to ours, it would've directed the regulators to proactively 
make that determination. That amendment didn't pass. But there is a 
failsafe in this bill.
  But, this is critical. Under this bill, if the SEC and CFTC look at 
these countries' regulations and determine that they are not in fact as 
strong or robust as our regulations, the agencies can require that 
companies operating in those countries follow U.S. law.
  Our regulators remain in control.
  Without this bill, firms operating overseas, even in the nine 
countries where most of this business takes place, will have to comply 
both with U.S. regulation, and the regulations of those countries.
  Again, this leaves us vulnerable to firms that want to exploit this 
patchwork regulatory framework. Or worse, it could drive derivative 
trading away from U.S. firms and further away from the view of our 
regulators.
  The SEC, just a few weeks ago, proposed a draft rule that 
acknowledges the need for harmonization between our rules and the rules 
of other countries.
  Here's the bottom line.
  The goal is really simple, and that is to reach an accommodation 
where we have strong regulatory requirements that are consistent across 
borders, that are strong, but that do not create loopholes or confusion 
in those markets.
  Mr. CONAWAY. Mr. Speaker, may I inquire as to how much time remains 
on each side?
  The SPEAKER pro tempore. The gentleman from Texas has 4\1/2\ minutes 
remaining. The gentleman from Georgia has 2 minutes remaining.
  Mr. CONAWAY. Mr. Speaker, I yield 2 minutes of my time to the 
gentleman from Georgia (Mr. Scott) for his use.
  The SPEAKER pro tempore. Without objection, the gentleman from 
Georgia will control the time.
  There was no objection.
  Mr. DAVID SCOTT of Georgia. With that, I'd like to yield 1\1/2\ 
minutes to the gentleman from Florida (Mr. Murphy).
  Mr. MURPHY of Florida. I thank the gentleman from Georgia for 
yielding.
  I rise in support of H.R. 1256.
  Title VII of Dodd-Frank contains important structural reforms to the 
derivatives market so that complicated, unregulated financial 
instruments can never bring our economy to its knees again. However, no 
law is perfect, and we should look for ways to improve Wall Street 
Reform to keep unintended consequences from trickling down to Main 
Street.
  The bill before us would put SEC and CFTC on the same page, giving 
American businesses the ability to compete with foreign companies on a 
level playing field. This will not destabilize the global financial 
system because the bill demands a broadly equivalent swaps regime as 
Title VII.

[[Page 8766]]

  The global derivatives market deserves smart regulations, not 
duplicative or conflicting requirements. I urge my colleagues to 
support this commonsense, technical adjustment.
  Mr. CONAWAY. I reserve the balance of my time.
  The SPEAKER pro tempore. The gentleman from Georgia is advised that 
he has 3 minutes remaining.
  Mr. DAVID SCOTT of Georgia. With that, I yield 1\1/2\ minutes to the 
gentlewoman from Wisconsin (Ms. Moore).
  Ms. MOORE. I thank the gentleman from Georgia.
  I rise today to support H.R. 1256, the Swap Jurisdiction Certainty 
Act.
  I proudly supported the Dodd-Frank Wall Street Reform Act because I 
believed that regulations of derivatives were desperately needed, and 
today I stand here to support what is a very modest change because I 
believe that the inability of the CFTC and the SEC to come together on 
a definition of ``U.S. persons'' is centrally important to effective 
cross-border rules and regulations and rules of the road.
  Now, I did support the gentlelady from California's amendment for 
switching the presumption. Because of the closed rules, we were unable 
to take that up at this time, and I believe it would have improved the 
bill. However, although this amendment was not adopted, I believe that 
the regulators will continue to have the authority to regulate any 
overseas swaps transactions under U.S. rules if they conclude that it 
is appropriate.
  I believe that without this bill we could find U.S. companies going 
outside not only the jurisdiction of the United States and our losing 
our competitiveness, but those swaps activities could migrate away from 
U.S. companies overseas to companies outside of the reach of U.S. 
regulators. So I would urge my colleagues to support this important 
legislation.
  Mr. CONAWAY. I reserve the balance of my time.
  Mr. DAVID SCOTT of Georgia. With no other speakers, Mr. Speaker, let 
me just close by saying, with the international, interconnected, 
complex nature of financial markets and the sizeable role the 
derivatives play within the global economy--as I mentioned, $600 
trillion--international harmonization of rulemaking between the CFTC 
and the SEC is critical, and a coordinated regulatory cooperation 
between the nine largest global partners keeping our financial 
institutions at a competitive position is critical. That's what this 
bill does.
  I urge all of my colleagues to support this important and timely 
piece of legislation.
  I yield back the balance of my time.

                              {time}  1640

  Mr. CONAWAY. Mr. Speaker, I yield myself the balance of my time.
  We have heard from a number of foreign governments around the world 
on their entities' regulatory schemes and--let me just say--strong 
disagreement with the cross-border guidance that Chairman Gensler and 
the CFTC proposed.
  We have heard from Ministers of Finance from the United Kingdom, the 
European Commission, France, Brazil, Germany, South Africa, Russia, and 
Switzerland. We've heard from the European Securities and Markets 
Authority. In Australia, we've heard from the Reserve Bank of Australia 
and the Australian Securities and Investments Commission. The Hong Kong 
Secretary for Financial Services and the Treasury. Japan has weighed in 
with the Japan Financial Services Agency and the Bank of Japan. The 
Monetary Authority of Singapore, the Swiss Financial Market Supervisory 
Authority, and from the UK we've heard from the Chancellor of the 
Exchequer and the Financial Services Authority.
  I would like to submit for the Record two of those letters; one to 
Secretary Lew from a number of folks, and the other is to Chairman 
Gensler from England, the European Union, Japan, as well as France. Mr. 
Speaker, all of these letters are posted on the Agriculture Committee's 
Web site for constituents and others to read and get a flavor of what 
our fellow regulators around the world are saying about this. None of 
them have any interest in an unregulated market. They all see the risks 
that we see.
  This bill simply asks the SEC and the CFTC to get along, come to a 
conclusion, whatever that might be, and then deal equitably with their 
fellow regulators around the world. These are bright, smart people, 
just like we are. For us to argue that we have the only perfect scheme 
to regulate derivatives is a bit wrongheaded. This bill goes a long way 
to fixing that.
  I would urge my colleagues to support the bill, vote in favor of it, 
and I yield back the balance of my time.

                                                    18 April 2013.

                Cross-Border OTC Derivatives Regulation

       Dear Secretary Lew: We, the undersigned, are writing to 
     express our concern at the lack of progress in developing 
     workable cross-border rules as part of reforms of the OTC 
     derivatives market.
       We are already starting to see evidence of fragmentation in 
     this vitally important financial market, as a result of lack 
     of regulatory coordination. We are concerned that, without 
     clear direction from global policymakers and regulators, 
     derivatives markets will recede into localised and less 
     efficient structures, impairing the ability of business 
     across the globe to manage risk. This will in turn dampen 
     liquidity, investment and growth.
       We share a common commitment with respect to OTC 
     derivatives reform, and are implementing rules across very 
     different markets with different characteristics and 
     different risk profiles, to support this global initiative. 
     We believe the basic principles on which cross-border rules 
     should be based are clear and widely shared, and we summarise 
     them in the annex to this letter. An approach in which 
     jurisdictions require that their own domestic regulatory 
     rules be applied to their firms' derivatives transactions 
     taking place in broadly equivalent regulatory regimes abroad 
     is not sustainable. Market places where firms from all our 
     respective jurisdictions can come together and do business 
     will not be able to function under such burdensome regulatory 
     conditions.
       A coherent collective solution is therefore needed for 
     cross-border derivatives, and regulators must work together 
     to avoid outright conflicts in regulation and minimise 
     overlaps as far as possible. In this regard, mutual 
     recognition, substituted compliance, exemptions, or a 
     combination of these would all be a valid approach, and 
     careful consideration should be given with respect to 
     registration requirements for firms operating across borders.
       Recent experience shows that these discussions can only 
     proceed if they are based on a shared understanding of the 
     overall outcome being sought. For this reason, we are writing 
     to urge that jurisdictions consider carefully the attached 
     principles to avoid cross-border conflicts and support the 
     Pittsburgh G20 reforms. We hope that these principles might 
     provide a useful foundation for regulatory discussions to 
     make progress.
       We urge all authorities to work with us to achieve an 
     outcome that meets the principles outlined in this letter and 
     we, in turn, commit to continue to work to address the areas 
     of concern which are most fundamental to others. To this end, 
     this letter is copied to the Chairman of the FSB; the 
     Chairman of the CFTC; the Chairman of the SEC; the Chairman 
     of the U.S. Senate Committee on Agriculture, Nutrition and 
     Forestry; and the Chairman of the US House of Representatives 
     Committee on Agriculture.
           Yours sincerely
     Guido Mantega,
       Minister of Finance, Government of Brazil.
     Pierre Moscovici,
       Minister of Finance, Government of France.
     Taro Aso,
       Deputy Prime Minister, Minister of Finance, Minister of 
     State for Financial Services, Government of Japan.
     Pravin Gordhan,
       Minister of Finance, Government of South Africa.
     George Osborne,
       Chancellor of the Exchequer, UK Government.
     Michel Barnier,
       Commissioner for Internal Market and Services, European 
     Commission.
     Wolfgang Schauble,
       Minister of Finance, Government of Germany.
     Anton Siluanov,
       Minister of Finance, Government of Russia.

[[Page 8767]]


     Eveline Widmer-Schlumpf,
       Finance Minister, Government of Switzerland.
                                  ____

                                                 October 17, 2012.

                     U.S. Cross Border Swaps Rules

     Hon. Gary Gensler,
     Chairman, Commodity Futures Trading Commission, Washington, 
         DC.
       Dear Chairman Gensler: We, the undersigned, would like to 
     share our concerns with you about the implementation of the 
     current phase of post-crisis regulatory reform, as you 
     reflect on the final shape of the CFTC cross border rules for 
     swaps.
       Faithfully implementing the reforms adopted by the G20 in 
     2009 in Pittsburgh on the clearing and electronic trading of 
     standardised OTC derivatives in a non-discriminatory way 
     remains of the utmost importance. As you know, Europe has 
     adopted legislation on clearing and is in the final stages of 
     negotiation on the trading aspect of the G20 Pittsburgh 
     reforms. In Japan, clearing requirements will be effective in 
     November and legislation on trading platforms was recently 
     approved by the Diet. While there may be differences in some 
     areas of detail, we believe the US, the Member States of the 
     EU and Japan are now set to implement these historic reforms 
     in a broadly consistent way in our respective jurisdictions.
       This is a significant achievement, capturing the large 
     majority of the global swaps market. But as has been 
     continuously stressed by G20 leaders since 2009, domestic 
     legislation alone does not fulfil the political aim that was 
     agreed in Pittsburgh and reaffirmed in Toronto in 2010. 
     Regulation across the G20 needs to be carefully implemented 
     in a harmonised way that does not risk fragmenting vital 
     global financial markets.
       For all its past faults, the derivatives market has allowed 
     financial counterparties across the globe to come together to 
     conduct more effective risk management and, as a result, 
     support economic development. Done properly this should be of 
     benefit to all. At a time of highly fragile economic growth, 
     we believe that it is critical to avoid taking steps that 
     risk a withdrawal from global financial markets into 
     inevitably less efficient regional or national markets.
       We of course recognise and understand the need for US and 
     other regulators to satisfy themselves on the adequacy of 
     regulation in other jurisdictions. But we would urge you 
     before finalising any rules, or enforcing any deadlines, to 
     take the time to ensure that US rulemaking works not just 
     domestically but also globally. We should collectively adopt 
     cross border rules consistent with the principle that 
     equivalence or substituted compliance with respect to partner 
     jurisdictions, and consequential reliance on the regulation 
     and supervision within those jurisdictions, should be used as 
     far as possible to avoid fragmentation of global markets. 
     Specifically, this principle needs to be enshrined in CFTC 
     cross border rules, so that all US persons wherever they are 
     located can transact with non-US entities using a 
     proportionate substituted compliance regime.
       We assure you our regulatory authorities stand ready to 
     work closely with you to ensure an effective cross border 
     regime is implemented at the earliest possible opportunity 
     and provide you with the necessary information and 
     reassurance regarding our respective regulatory frameworks.
           Yours sincerely,
     George Osborne,
       Chancellor of the Exchequer, UK Government.
     Michel Barnier,
       Commissioner for Internal Market and Services, European 
     Commission.
     Ikko Nakatsuka
       Minister of State for Financial Services, Government of 
     Japan.
     Pierre Moscovici,
       Minister of Finance, Government of France.

  Mr. BLUMENAUER. Mr. Speaker, I supported the passage of the Dodd-
Frank Wall Street Reform Act in 2010 to rein in Wall Street, end 
taxpayer bailouts of big banks, and protect consumers. Under this Act, 
the CFTC and the SEC were charged with regulating a number of 
previously unregulated or under-regulated Wall Street and financial 
service sector activities that led in large part to the 2008 crisis, 
including the $700 trillion derivatives market.
  While Congress has a responsibility to ensure that the reforms 
enacted under Dodd-Frank are clear and effective--and many may still 
require clarification from Congress--the bill under consideration 
today, H.R. 1526, is premature and potentially damaging. I therefore do 
not support this legislation.
  Regulators at the CFTC and the SEC continue to make progress on 
implementing important regulations of the derivatives market. Given 
this progress and the fact that this is an ongoing process, intervening 
and micromanaging the rulemaking process at this stage would only delay 
the positive benefits these changes will have for Americans.
  I also have concerns that this legislation sets a policy that would 
make it more difficult for regulators to ensure that U.S. derivatives 
transactions conducted overseas through foreign entities are subject to 
the new rules, potentially opening up a hole in the regulatory process. 
In requiring that the CFTC and the SEC issue a joint determination 
along with a formal report to Congress to establish that another 
country's rules are not ``broadly comparable'' to U.S. rules, this 
legislation creates an extra layer of bureaucracy on these already 
overburdened agencies that will hinder their effectiveness.
  Regulating the derivatives market is a huge and important job. This 
legislation slows this progress without benefit to the American people 
or our economy.
  Mr. MARKEY. Mr. Speaker, I rise in opposition to the bill being 
considered today, H.R. 1256, the Swap Jurisdiction Certainty Act. 
Although couched as an innocuous bill to ensure that U.S. banks have 
clarity about how swaps and derivatives trades are to be managed 
between U.S. and non-U.S. entities, in reality this bill will 
significantly impede efforts to apply strong regulations on Wall Street 
banks trading in these financial products.
  The size of the global swaps market is staggering. According to the 
Bank for International Settlements, at the end of last year, the total 
notional value of outstanding over-the-counter swaps was over 632 
trillion dollars. Again, 632 trillion dollars. In comparison, the gross 
domestic product of the entire United States was just 15.1 trillion 
dollars at the end of last year. The swaps market is over 40 times 
larger than the entire U.S. economy; in fact, the swaps market is 10 
times larger than the entire global economy.
  This market is also truly global in scope. Many of our major Wall 
Street banks, such as J.P. Morgan, Bank of America, and Goldman Sachs, 
have significant foreign subsidiaries. Bank of America alone has 
subsidiaries in approximately 40 countries. Given the massive size of 
this market, we need the strongest possible rules over swaps 
transactions in foreign subsidiaries that could adversely affect U.S. 
banks and bank holding companies.
  Unfortunately, this bill will prevent our primary regulator of the 
swaps market, the Commodity Futures Trading Commission, from finalizing 
strong regulations. The CFTC has spent years crafting strong rules 
governing cross-border swaps and derivatives and has received a large 
amount of industry input on these rules. The most recent draft was 
circulated on May 16, 2013. If this bill passes, that entire process 
will be stopped in its tracks, even as the rules are supposed to be 
finalized within the next 30 days. Enacting this bill now is tantamount 
to tripping the CFTC at the finish line.
  Even beyond the poor timing of this bill, the bill will substantially 
weaken the CFTC's ability to regulate the global swaps market. Under 
the text of H.R. 1256, the CFTC and the SEC are to jointly release 
rules governing cross-border swaps. Yet, as part of that rulemaking, 
the CFTC and SEC are required to assume that a foreign person in 
compliance with the regulations of any of the nine largest combined 
swap jurisdictions is also in compliance with all U.S. swaps rules. 
Given that the United States sets the global standard in financial 
matters, this provision effectively makes all global swaps rules only 
as strong as the rules of the weakest country among the nine largest 
jurisdictions. In other words, it will prompt a regulatory race to the 
bottom, which is a recipe for disaster.
  Have we learned nothing from the excesses of the Bush Administration, 
when financial deregulation allowed excessively risk derivatives 
driving a financial market collapse? Just five years after that 
experience, this is a bill that allows for increased deregulation of 
some of Wall Street's most dangerous financial products at a time when 
we need more regulation of swaps. It was only one year ago that J.P. 
Morgan experienced its ``London Whale'' fiasco, where bad decisions by 
J.P. Morgan personnel in London resulted in New York based J.P. Morgan 
taking a loss of $6.2 billion. No one in senior management, risk, 
legal, or compliance was aware of the risks or liabilities being 
assumed by people in the London office. Yet, if CFTC's cross-border 
swaps rules were in place, maybe that disaster would not have happened.
  U.S. based swaps dealers are increasingly fragmented, and we need 
strong central rules to minimize the risk of swaps trading causing 
another financial crisis. At a time when we are just four years removed 
from the worst recession since the Great Depression, a recession 
sparked by insufficient regulation of the swaps market, this bill is 
the wrong solution for the

[[Page 8768]]

wrong problem at the wrong time. I urge my colleagues to vote no on 
H.R. 1256.
  Mr. VAN HOLLEN. Mr. Speaker, I have substantial sympathy with those 
seeking regulatory clarity and with U.S. companies wishing to avoid 
being competitively disadvantaged when operating abroad. At the same 
time, one of the hard-learned lessons from the recent financial crisis 
is that outsized risk readily crosses national boundaries, which is why 
prudential regulation of cross-border derivatives transactions that can 
impact our economy was embedded in the Dodd-Frank Wall Street Reform 
law.
  The problem with today's legislation is that it seeks to achieve 
regulatory certainty for these kinds of transactions by effectively 
substituting foreign derivatives rules for our own safeguards unless 
the Commodity Futures Trading Commission (CFTC) and the Securities and 
Exchange Commission (SEC) both agree that the foreign rules in question 
are not ``broadly equivalent'' to our own.
  Like the Administration, I would prefer for Americans to rely on U.S. 
law for protection in this area, and for our regulators to finish their 
work on these important safeguards in coordination with their foreign 
counterparts--rather than presume that foreign regulation, and in some 
cases foreign regulation that hasn't even been written yet, will be 
sufficient to do the job.
  Mr. CUMMINGS. Mr. Speaker, yesterday I voted ``yes'' in error for the 
Swap Jurisdiction Certainty Act. As I stated in a dear colleague with 
fellow members, this bill will ``undermine our financial regulators' 
efforts to regulate cross-border derivatives . . . putting our 
financial markets and economy at risk and undermining one of the most 
important provisions of Wall Street Reform.'' I stand firm with 124 of 
my colleagues who voted against this harmful legislation and will 
continue to fight for sensible policies that will prevent the kind of 
reckless gambling by our financial institutions that led us to the 
brink of economic catastrophe.
  The SPEAKER pro tempore. All time for debate has expired.
  Pursuant to House Resolution 256, the previous question is ordered on 
the bill, as amended.
  The question is on the engrossment and third reading of the bill.
  The bill was ordered to be engrossed and read a third time, and was 
read the third time.


                           Motion to Recommit

  Mr. SEAN PATRICK MALONEY of New York. Mr. Speaker, I have a motion to 
recommit at the desk.
  The SPEAKER pro tempore. Is the gentleman opposed to the bill?
  Mr. SEAN PATRICK MALONEY of New York. I am in its current form.
  The SPEAKER pro tempore. The Clerk will report the motion to 
recommit.
  The Clerk read as follows:

         Page 7, after line 24, insert the following:
         (4) Additional criteria on china, iran, and other 
     countries who engage in cyber attacks or violate the iran 
     sanctions act.--The Commissions shall determine that the 
     regulatory requirements of a country, administrative region, 
     or other foreign jurisdiction are not broadly equivalent to 
     United States swaps requirements if the Commissions determine 
     that such country, administrative region, or other foreign 
     jurisdiction--
         (A) engages in cyber attacks and does not have, or has 
     but does not enforce, laws to deter cyber attacks against 
     U.S. person, including U.S. companies, and the Government of 
     the United States; and
         (B) is in violation of, or does not enforce comparable 
     restrictions to, the Iran Sanctions Act of 1996, the 
     Comprehensive Iran Sanctions, Accountability, and Divestment 
     Act of 2010, the Iran Threat Reduction and Syria Human Rights 
     Act of 2012, and the International Emergency Economic Powers 
     Act.
         Page 8, line 1, strike ``(4)'' and insert ``(5)''.
         Page 11, after line 2, insert the following:
         (g) Exclusions of Corporations That Violate Iran 
     Sanctions Act or Engage in Cyber Attacks.--A non-U.S. person 
     shall not receive the exemption provided in subsection (d) if 
     the Commissions determine such person has--
         (1) been the subject of a civil or criminal proceeding 
     for violating the Iran Sanctions Act of 1996, the 
     Comprehensive Iran Sanctions, Accountability, and Divestment 
     Act of 2010, the Iran Threat Reduction and Syria Human Rights 
     Act of 2012, or the International Emergency Economic Powers 
     Act; or
         (2) been the subject of a civil or criminal proceeding 
     related to cyber attacks on the Government of the United 
     States or U.S. companies.
         Page 11, line 3, strike ``(g)'' and insert ``(h)''.

  Mr. SEAN PATRICK MALONEY of New York (during the reading). I ask 
unanimous consent to dispense with the reading.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from New York?
  Mrs. WAGNER. I object, Mr. Speaker.
  The SPEAKER pro tempore. Objection is heard.
  The Clerk will read.
  The Clerk continued to read.
  The SPEAKER pro tempore. The gentleman from New York is recognized 
for 5 minutes in support of his motion.
  Mr. SEAN PATRICK MALONEY of New York. Thank you, Mr. Speaker.
  I rise today to offer the final amendment to the bill. It will not 
kill the bill or send it back to the committee. If adopted, the bill 
will immediately proceed to final passage as amended.
  I rise to offer this motion to recommit because this bill in its 
current form misses an opportunity to do more, and we should not let 
that opportunity pass.
  The underlying legislation has the goal of extending reasonable 
accommodations to like-minded friends and allies around the globe. A 
stronger, better coordinated global regulatory framework is, of course, 
a goal that we all share.
  My amendment is simple. It says that the accommodations we extend to 
our friends must not be extended to those who actively seek to harm the 
United States--our citizens, our allies, our corporations--by violating 
the Iran Sanctions Act or by engaging in cyber attacks against the 
United States.
  The dangers of a nuclear Iran are real. They are made even more real 
by actors who continue to bypass American and U.N. sanctions.
  Iran is an existential threat to our friend and our ally Israel. Iran 
is a growing menace in the Middle East, arming both the Syrian regime 
and Hezbollah, and undermining peace in Iraq. Iran is actively pursuing 
the development of a nuclear capability, which we cannot allow.
  We cannot let countries or corporations who do not share our values 
reap the benefits of this bill. That's why my amendment would target 
countries and corporations and deny them the benefits of this bill if 
they violate the Iran Sanctions Act.
  We have very strong laws on the books blocking any violation of the 
Iran Sanctions Act, here or abroad, either by countries or corporations 
who don't share our values. That's a good thing.
  In fact, the President just recently issued a new Executive order 
further tightening these sanctions, particularly in the financial 
sector. That's why this final amendment is key to keeping this 
legislation aligned with these efforts to keep Iran isolated from the 
international community and to eliminate any new sources of funding to 
the Iranian regime.
  My amendment also targets countries that engage in cyber attacks 
against our country or our corporations. Countries like Iran and other 
countries such as China try to undermine the United States, our 
companies, our infrastructure, our systems every day, thousands of 
times a day.
  Cyber attacks result in a huge economic loss to our intellectual 
property to the tune of hundreds of billions of dollars annually, not 
to mention the extreme danger to our national security, our banks, our 
infrastructure.
  My amendment doesn't allow transactions under this bill that would 
harm either the United States or Israel. We cannot and should not walk 
away from making this bill better, and I urge my colleagues to support 
my amendment.
  I yield back the balance of my time.
  Mrs. WAGNER. Mr. Speaker, I rise in opposition to the motion.
  The SPEAKER pro tempore. The gentlewoman from Missouri is recognized 
for 5 minutes.
  Mrs. WAGNER. Mr. Speaker, my friends on the other side of the aisle 
just refuse to face the fact that 3 years ago with the passage of Dodd-
Frank they created some of the most complex and confusing rules our 
economy has ever seen.
  It is by no means a coincidence that the difficulties faced by 
farmers and small businesses and families in obtaining credit today is 
a direct result

[[Page 8769]]

of Dodd-Frank's chilling effect on our capital markets.
  The bill that we are considering today has nothing to do with cyber 
attacks. Although this is an important matter, this issue has nothing 
to do with cyber attacks. If it was so important, I'm wondering why it 
was not offered in either committee where we were fully debating this 
particular bill.

                              {time}  1650

  Our system is broken, absolutely broken, at the Federal regulatory 
level. The SEC and the CFTC have promulgated two completely different 
regulations to govern cross-border swap transactions. The delay and 
disorder on this issue end today.
  Mr. Speaker, disparate regulations governing the same behavior hinder 
the capital markets and hurt the economy. I am hopeful that a 
bipartisan vote on this legislation will send a strong signal to our 
regulators in Washington that finally, after 3 years, they need to come 
together for the good of economic growth and prosperity. I urge a 
``no'' vote on the motion to recommit and a ``yes'' vote on H.R. 1256.
  I yield back the balance of my time.
  The SPEAKER pro tempore. Without objection, the previous question is 
ordered on the motion to recommit.
  There was no objection.
  The SPEAKER pro tempore. The question is on the motion to recommit.
  The question was taken; and the Speaker pro tempore announced that 
the noes appeared to have it.
  Mr. SEAN PATRICK MALONEY of New York. Mr. Speaker, on that I demand 
the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 and clause 9 of rule 
XX, this 15-minute vote on the motion to recommit will be followed by 
5-minute votes on the question on passage of H.R. 1256, if ordered; and 
the motion to suspend the rules and pass H.R. 1038.
  The vote was taken by electronic device, and there were--yeas 194, 
nays 230, not voting 10, as follows:

                             [Roll No. 217]

                               YEAS--194

     Andrews
     Barber
     Barrow (GA)
     Bass
     Beatty
     Becerra
     Bera (CA)
     Bishop (GA)
     Bishop (NY)
     Blumenauer
     Bonamici
     Brady (PA)
     Braley (IA)
     Brown (FL)
     Brownley (CA)
     Bustos
     Butterfield
     Capps
     Capuano
     Cardenas
     Carney
     Carson (IN)
     Cartwright
     Castor (FL)
     Castro (TX)
     Cicilline
     Clarke
     Clay
     Cleaver
     Clyburn
     Cohen
     Connolly
     Conyers
     Cooper
     Costa
     Courtney
     Crowley
     Cuellar
     Cummings
     Davis (CA)
     Davis, Danny
     DeFazio
     DeGette
     Delaney
     DeLauro
     DelBene
     Dingell
     Doggett
     Doyle
     Duckworth
     Duncan (TN)
     Edwards
     Ellison
     Engel
     Enyart
     Eshoo
     Esty
     Farr
     Fattah
     Foster
     Frankel (FL)
     Fudge
     Gabbard
     Gallego
     Garamendi
     Garcia
     Grayson
     Green, Al
     Green, Gene
     Gutierrez
     Hahn
     Hanabusa
     Hastings (FL)
     Heck (WA)
     Higgins
     Himes
     Hinojosa
     Holt
     Honda
     Horsford
     Hoyer
     Huffman
     Israel
     Jackson Lee
     Jeffries
     Johnson (GA)
     Johnson, E. B.
     Jones
     Kaptur
     Keating
     Kelly (IL)
     Kennedy
     Kildee
     Kilmer
     Kind
     Kirkpatrick
     Kuster
     Langevin
     Larsen (WA)
     Larson (CT)
     Lee (CA)
     Levin
     Lewis
     Lipinski
     Loebsack
     Lofgren
     Lowenthal
     Lowey
     Lujan Grisham (NM)
     Lujan, Ben Ray (NM)
     Lynch
     Maffei
     Maloney, Carolyn
     Maloney, Sean
     Matheson
     Matsui
     McCollum
     McDermott
     McGovern
     McIntyre
     McNerney
     Meng
     Michaud
     Miller, George
     Moran
     Murphy (FL)
     Nadler
     Napolitano
     Neal
     Negrete McLeod
     Nolan
     O'Rourke
     Owens
     Pallone
     Pascrell
     Pastor (AZ)
     Payne
     Pelosi
     Perlmutter
     Peters (CA)
     Peters (MI)
     Peterson
     Pingree (ME)
     Pocan
     Price (NC)
     Quigley
     Rahall
     Rangel
     Richmond
     Roybal-Allard
     Ruiz
     Ruppersberger
     Rush
     Ryan (OH)
     Sanchez, Linda T.
     Sanchez, Loretta
     Sarbanes
     Schakowsky
     Schiff
     Schneider
     Schrader
     Schwartz
     Scott (VA)
     Scott, David
     Serrano
     Sewell (AL)
     Shea-Porter
     Sherman
     Sinema
     Sires
     Slaughter
     Smith (WA)
     Speier
     Swalwell (CA)
     Takano
     Thompson (CA)
     Thompson (MS)
     Tierney
     Titus
     Tonko
     Tsongas
     Van Hollen
     Vargas
     Veasey
     Vela
     Velazquez
     Visclosky
     Walz
     Waters
     Watt
     Waxman
     Welch
     Wilson (FL)
     Yarmuth

                               NAYS--230

     Aderholt
     Alexander
     Amash
     Amodei
     Bachmann
     Bachus
     Barletta
     Barr
     Barton
     Benishek
     Bentivolio
     Bilirakis
     Bishop (UT)
     Black
     Blackburn
     Bonner
     Boustany
     Brady (TX)
     Bridenstine
     Brooks (AL)
     Brooks (IN)
     Broun (GA)
     Buchanan
     Bucshon
     Burgess
     Calvert
     Camp
     Cantor
     Capito
     Carter
     Cassidy
     Chabot
     Chaffetz
     Coble
     Coffman
     Cole
     Collins (GA)
     Collins (NY)
     Conaway
     Cook
     Cotton
     Cramer
     Crawford
     Crenshaw
     Culberson
     Daines
     Davis, Rodney
     Denham
     Dent
     DeSantis
     DesJarlais
     Diaz-Balart
     Duffy
     Duncan (SC)
     Ellmers
     Farenthold
     Fincher
     Fitzpatrick
     Fleischmann
     Fleming
     Flores
     Forbes
     Fortenberry
     Foxx
     Franks (AZ)
     Frelinghuysen
     Gardner
     Garrett
     Gerlach
     Gibbs
     Gibson
     Gingrey (GA)
     Gohmert
     Goodlatte
     Gosar
     Gowdy
     Granger
     Graves (GA)
     Graves (MO)
     Griffin (AR)
     Griffith (VA)
     Grijalva
     Grimm
     Guthrie
     Hall
     Hanna
     Harper
     Hartzler
     Hastings (WA)
     Heck (NV)
     Hensarling
     Herrera Beutler
     Holding
     Hudson
     Huelskamp
     Huizenga (MI)
     Hultgren
     Hunter
     Hurt
     Issa
     Jenkins
     Johnson (OH)
     Johnson, Sam
     Jordan
     Joyce
     Kelly (PA)
     King (IA)
     King (NY)
     Kingston
     Kinzinger (IL)
     Kline
     Labrador
     LaMalfa
     Lamborn
     Lance
     Lankford
     Latham
     Latta
     LoBiondo
     Long
     Lucas
     Luetkemeyer
     Lummis
     Marchant
     Marino
     Massie
     McCarthy (CA)
     McCaul
     McClintock
     McHenry
     McKeon
     McKinley
     McMorris Rodgers
     Meadows
     Meehan
     Messer
     Mica
     Miller (FL)
     Miller (MI)
     Miller, Gary
     Mullin
     Mulvaney
     Murphy (PA)
     Neugebauer
     Noem
     Nugent
     Nunes
     Nunnelee
     Olson
     Palazzo
     Paulsen
     Pearce
     Perry
     Petri
     Pittenger
     Pitts
     Poe (TX)
     Polis
     Pompeo
     Posey
     Price (GA)
     Radel
     Reed
     Reichert
     Renacci
     Ribble
     Rice (SC)
     Rigell
     Roby
     Roe (TN)
     Rogers (AL)
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Rokita
     Rooney
     Ros-Lehtinen
     Roskam
     Ross
     Rothfus
     Royce
     Runyan
     Ryan (WI)
     Salmon
     Sanford
     Scalise
     Schock
     Schweikert
     Scott, Austin
     Sensenbrenner
     Sessions
     Shimkus
     Shuster
     Simpson
     Smith (MO)
     Smith (NE)
     Smith (NJ)
     Smith (TX)
     Southerland
     Stewart
     Stivers
     Stockman
     Stutzman
     Terry
     Thompson (PA)
     Thornberry
     Tiberi
     Tipton
     Turner
     Upton
     Valadao
     Wagner
     Walberg
     Walden
     Walorski
     Weber (TX)
     Webster (FL)
     Wenstrup
     Whitfield
     Williams
     Wilson (SC)
     Wittman
     Wolf
     Womack
     Woodall
     Yoder
     Yoho
     Young (AK)
     Young (FL)
     Young (IN)

                             NOT VOTING--10

     Campbell
     Chu
     Deutch
     Harris
     Markey
     McCarthy (NY)
     Meeks
     Moore
     Wasserman Schultz
     Westmoreland

                              {time}  1716

  Messrs. CALVERT, ROGERS of Alabama, YOUNG of Indiana, and CAMP 
changed their vote from ``yea'' to ``nay.''
  Mr. HUFFMAN and Ms. WILSON of Florida changed their vote from ``nay'' 
to ``yea.''
  So the motion to recommit was rejected.
  The result of the vote was announced as above recorded.
  The SPEAKER pro tempore. The question is on the passage of the bill.
  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.


                             Recorded Vote

  Ms. WATERS. Mr. Speaker, I demand a recorded vote.
  A recorded vote was ordered.
  The SPEAKER pro tempore. This is a 5-minute vote.
  The vote was taken by electronic device, and there were--ayes 301, 
noes 124, not voting 9, as follows:

                             [Roll No. 218]

                               AYES--301

     Aderholt
     Alexander
     Amash
     Amodei
     Bachmann
     Bachus
     Barber
     Barletta
     Barr
     Barrow (GA)
     Barton
     Benishek
     Bentivolio
     Bera (CA)
     Bilirakis
     Bishop (GA)
     Bishop (UT)
     Black
     Blackburn
     Bonner
     Boustany
     Brady (TX)
     Brooks (AL)
     Brooks (IN)
     Broun (GA)
     Brownley (CA)
     Buchanan
     Bucshon
     Burgess
     Butterfield
     Calvert
     Camp
     Cantor
     Capito
     Cardenas
     Carney
     Carson (IN)
     Carter
     Cassidy
     Chabot
     Chaffetz
     Clay
     Clyburn
     Coble
     Coffman
     Cole
     Collins (GA)
     Collins (NY)
     Conaway
     Connolly
     Cook
     Cooper
     Costa
     Cotton
     Cramer
     Crawford
     Crenshaw
     Crowley
     Cuellar
     Culberson
     Cummings
     Daines
     Davis, Rodney
     Delaney
     DelBene
     Denham
     Dent
     DeSantis
     DesJarlais

[[Page 8770]]


     Diaz-Balart
     Duckworth
     Duffy
     Duncan (SC)
     Duncan (TN)
     Ellmers
     Esty
     Farenthold
     Fincher
     Fitzpatrick
     Fleischmann
     Fleming
     Flores
     Forbes
     Fortenberry
     Foster
     Foxx
     Franks (AZ)
     Frelinghuysen
     Gabbard
     Gallego
     Garcia
     Gardner
     Garrett
     Gerlach
     Gibbs
     Gibson
     Gingrey (GA)
     Gohmert
     Goodlatte
     Gosar
     Gowdy
     Granger
     Graves (GA)
     Graves (MO)
     Griffin (AR)
     Griffith (VA)
     Grijalva
     Grimm
     Guthrie
     Gutierrez
     Hahn
     Hall
     Hanabusa
     Hanna
     Harper
     Harris
     Hartzler
     Hastings (WA)
     Heck (NV)
     Heck (WA)
     Hensarling
     Herrera Beutler
     Himes
     Holding
     Horsford
     Hudson
     Huelskamp
     Huizenga (MI)
     Hultgren
     Hunter
     Hurt
     Israel
     Issa
     Jenkins
     Johnson (GA)
     Johnson (OH)
     Johnson, Sam
     Jordan
     Joyce
     Kelly (IL)
     Kelly (PA)
     Kilmer
     Kind
     King (IA)
     King (NY)
     Kingston
     Kinzinger (IL)
     Kirkpatrick
     Kline
     Kuster
     Labrador
     LaMalfa
     Lamborn
     Lance
     Lankford
     Larsen (WA)
     Latham
     Latta
     Lipinski
     LoBiondo
     Long
     Lowey
     Lucas
     Luetkemeyer
     Lummis
     Maffei
     Maloney, Sean
     Marchant
     Marino
     Massie
     Matheson
     McCarthy (CA)
     McCaul
     McClintock
     McHenry
     McIntyre
     McKeon
     McKinley
     McMorris Rodgers
     McNerney
     Meadows
     Meehan
     Meng
     Messer
     Mica
     Miller (FL)
     Miller (MI)
     Miller, Gary
     Moore
     Mullin
     Mulvaney
     Murphy (FL)
     Murphy (PA)
     Neugebauer
     Noem
     Nugent
     Nunes
     Nunnelee
     Olson
     Owens
     Palazzo
     Paulsen
     Pearce
     Perlmutter
     Perry
     Peters (CA)
     Peters (MI)
     Peterson
     Petri
     Pittenger
     Pitts
     Poe (TX)
     Polis
     Pompeo
     Posey
     Price (GA)
     Quigley
     Radel
     Rahall
     Reed
     Reichert
     Renacci
     Ribble
     Rice (SC)
     Richmond
     Rigell
     Roby
     Roe (TN)
     Rogers (AL)
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Rokita
     Rooney
     Roskam
     Ross
     Rothfus
     Royce
     Ruiz
     Runyan
     Ruppersberger
     Ryan (WI)
     Salmon
     Sanchez, Loretta
     Sanford
     Scalise
     Schneider
     Schock
     Schrader
     Schwartz
     Schweikert
     Scott, Austin
     Scott, David
     Sensenbrenner
     Sessions
     Sewell (AL)
     Sherman
     Shimkus
     Shuster
     Simpson
     Sinema
     Smith (MO)
     Smith (NE)
     Smith (NJ)
     Smith (TX)
     Southerland
     Stewart
     Stivers
     Stockman
     Stutzman
     Terry
     Thompson (MS)
     Thompson (PA)
     Thornberry
     Tiberi
     Tipton
     Turner
     Upton
     Valadao
     Vargas
     Veasey
     Vela
     Wagner
     Walberg
     Walden
     Walorski
     Weber (TX)
     Webster (FL)
     Wenstrup
     Whitfield
     Williams
     Wilson (SC)
     Wittman
     Wolf
     Womack
     Woodall
     Yoder
     Yoho
     Young (AK)
     Young (FL)
     Young (IN)

                               NOES--124

     Andrews
     Bass
     Beatty
     Becerra
     Bishop (NY)
     Blumenauer
     Bonamici
     Brady (PA)
     Braley (IA)
     Bridenstine
     Brown (FL)
     Bustos
     Capps
     Capuano
     Cartwright
     Castor (FL)
     Castro (TX)
     Cicilline
     Clarke
     Cleaver
     Cohen
     Conyers
     Courtney
     Davis (CA)
     Davis, Danny
     DeFazio
     DeGette
     DeLauro
     Dingell
     Doggett
     Doyle
     Edwards
     Ellison
     Engel
     Enyart
     Eshoo
     Farr
     Fattah
     Frankel (FL)
     Fudge
     Garamendi
     Grayson
     Green, Al
     Green, Gene
     Hastings (FL)
     Higgins
     Hinojosa
     Holt
     Honda
     Hoyer
     Huffman
     Jackson Lee
     Jeffries
     Johnson, E. B.
     Jones
     Kaptur
     Keating
     Kennedy
     Kildee
     Langevin
     Larson (CT)
     Lee (CA)
     Levin
     Lewis
     Loebsack
     Lofgren
     Lowenthal
     Lujan Grisham (NM)
     Lujan, Ben Ray (NM)
     Lynch
     Maloney, Carolyn
     Matsui
     McCollum
     McDermott
     McGovern
     Michaud
     Miller, George
     Moran
     Nadler
     Napolitano
     Neal
     Negrete McLeod
     Nolan
     O'Rourke
     Pallone
     Pascrell
     Pastor (AZ)
     Payne
     Pelosi
     Pingree (ME)
     Pocan
     Price (NC)
     Rangel
     Roybal-Allard
     Rush
     Ryan (OH)
     Sanchez, Linda T.
     Sarbanes
     Schakowsky
     Schiff
     Scott (VA)
     Serrano
     Shea-Porter
     Sires
     Slaughter
     Smith (WA)
     Speier
     Swalwell (CA)
     Takano
     Thompson (CA)
     Tierney
     Titus
     Tonko
     Tsongas
     Van Hollen
     Velazquez
     Visclosky
     Walz
     Waters
     Watt
     Waxman
     Welch
     Wilson (FL)
     Yarmuth

                             NOT VOTING--9

     Campbell
     Chu
     Deutch
     Markey
     McCarthy (NY)
     Meeks
     Ros-Lehtinen
     Wasserman Schultz
     Westmoreland

                              {time}  1723

  So the bill was passed.
  The result of the vote was announced as above recorded.
  A motion to reconsider was laid on the table.

                          ____________________