ABA has developed a briefing paper on the CFTC’s proposed rule that would exempt cooperative lenders -- including Farm Credit System institutions and credit unions -- from Dodd-Frank Act clearing requirements for swaps entered into with eligible borrowers, or used to hedge balance-sheet risk.
The briefing paper explains that banks are not eligible for a clearing exemption if they have assets of more than $10 billion. But under the CFTC’s proposed rule cooperative lenders would be eligible regardless of their asset size -- including a FCS bank with nearly $90 billion in assets.
ABA makes the case in the briefing paper that the CFTC proposed rule has no policy justification, would cause competitive harm, and is arbitrary and capricious.
The comment deadline on the proposal is Aug. 16.
Read the briefing paper.
Read the proposal.