Why is the Agriculture Committee Deregulating Financial Derivatives?

admin | March 29, 2013

On March 20, the House Agriculture Committee debated and passed seven bills designed to roll back derivatives regulations that were created by Congress three years ago in the Dodd-Frank financial reform bill. 

According to the Office of the Comptroller of the Currency, the top four commercial banks—Bank of America, Goldman Sachs Bank, Citibank, and JPMorgan Chase Bank—account for 93.2% of the derivative contracts held for trading. That amounts to $208 trillion in notional value* outstanding in derivatives at these institutions. 

Data: MapLight analysis of campaign contributions to members of the 113th Congress since 2009 from the political action committees (PACs) of the top four commercial banks. Data source: FEC.

Company$ to House Agriculture Committee$ to Congress
Goldman Sachs $112,000 $1,532,500
Bank of America $86,000 $1,522,614
JPMorgan Chase $67,500 $1,219,249
Citigroup $32,500 $631,000
Total: $298,000 $4,905,363

  • The PACs of Goldman Sachs, Bank of America, JPMorgan Chase, and Citigroup contributed $298,000 to members of the House Agriculture Committee since 2009.
*includes futures, exchange traded options, over the counter options, forwards, and swaps

Correction: A previous version of this post included contributions to Mike Rogers (R - MI) instead of Mike Rogers (R - AL). The current version has been updated to exclude contributions to Mike Rogers (R - MI) and include contributions to Mike Rogers (R - AL), who is a member of the Agriculture Committee.

Methodology: MapLight analysis of campaign contributions from the PACs of top four commercial banks to committees associated with members of 113th Congress since January 1, 2009, based on latest available data from the FEC as of March 26, 2013.

The following seven bills were approved by the committee—six by voice vote and one, H.R. 992, by a vote of 31-14—and are now awaiting action by the full House or the Financial Services Committee: 

H.R. 634 - Business Risk Mitigation and Price Stabilization Act
H.R. 677 - Inter-Affiliate Swap Clarification Act
H.R. 742 - Swap Data Repository and Clearinghouse Indemnification Correction Act
H.R. 992 - Swaps Regulatory Improvement Act
H.R. 1003 - To improve consideration by the Commodity Futures Trading Commission of the costs and benefits of its regulations and orders.
H.R. 1038 - Public Power Risk Management Act
H.R. 1256 - Swap Jurisdiction Certainty Act

Background: The House Agriculture Committee was given jurisdiction over derivatives in the late 19th century, when farmers began using derivatives to stabilize crop prices. Over the years, derivatives have transformed into a complex, global financial market with little to do with agriculture, but the Agriculture Committee has held onto their jurisdiction over the matter.

Photo credit: thetaxhaven / Flickr