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Thursday, December 11, 2014

ABA Endorses Swaps Pushout Provision in Spending Bill

As some Democratic lawmakers voiced objections to including repeal of the Dodd-Frank Act’s swaps pushout rule in the 2015 spending bill, ABA emphasized the entire banking industry’s support for the bipartisan measure.

“The majority of banks, including community banks, that use swaps do so in order to hedge or mitigate risk from their ordinary business activities, including lending,” said ABA EVP James Ballentine, adding that banks also help their customers hedge risks. “The pushout requirement to move some swaps into separate affiliates makes one-stop shopping impossible for businesses ranging from family farms to energy companies that want to hedge against commodity price changes.”

Under the Dodd-Frank Act, insured banks must get rid of derivatives trading businesses, but regulators and the industry have expressed concerns about the workability of the rule. A bipartisan House majority passed a swaps pushout repeal bill last year.

Read the statement.

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