Cummings Criticizes CFTC for Failing to Impose Strong Regulations on Wall Street

Cummings Criticizes CFTC for Failing to Impose Strong Regulations on Wall Street

Finalized Rule Continues Allowing Big Banks to

Fund Risky Bets With Taxpayer-Backed Dollars

Washington, D.C. (Dec. 16, 2015)—Today, Rep. Elijah E. Cummings, Ranking Member of the House Committee on Oversight and Government Reform, issued the following statement criticizing a rule finalized by the Commodity Futures Trading Commission (CFTC), which failed to impose strong initial margin requirements on the overwhelming majority of transactions among affiliates, allowing big Wall Street banks to continue insuring risky trades with taxpayer dollars:

"Today, the CFTC had an opportunity to mitigate the financial risks to the American taxpayers, but it failed. As a result, banks will continue to move their risky trades onto the books of their subsidiaries—which are insured with federal tax dollars—and the American people may have to bail them out if their trades go south. Given the vacancies on the Commission, I urge President Obama to nominate individuals who will protect the American economy by standing up against the risky actions of the financial industry."

In November, Cummings and Senator Elizabeth Warren sent a letter urging the CFTC and the Securities and Exchange Commission to put in place strong rules to protect taxpayers and the financial system from these risky trades.

The CFTC is a five-member Commission, but there are currently only three Commissioners, and the rule was passed by a margin of 2 to 1. Cummings urged President Obama to appoint a strong progressive who will stand up to Wall Street abuses.