This story appeared in Bank Digest.
The Senate passed by a vote of 94 to 4 the Terrorism Risk Insurance Program Reauthorization Act, H.R. 26, which contains relief for non-financial derivatives end-users, such as airline companies hedging the price of jet fuel, from the margin and capital requirements of Title VII of the Dodd-Frank Act. A proposed amendment to strip out the derivatives end-user provision was defeated on a 66 to 31 vote. Since the House passed the bill by a vote of 416 to 5 earlier this week, the measure is now cleared for the President, who is expected to sign it.
Applauding passage of TRIA with the relief for non-financial derivatives end-users, Financial Services Chair Jeb Hensarling (R-Texas) said that Congress would be negligent in its duties if it did not continually monitor and fix Dodd-Frank's unintended consequences. One of which is the provision that requires burdensome derivatives margin regulations intended for Wall Street firms to apply to farmers, ranchers and small businesses.
The measure includes a provision authored by Sen. David Vitter (R-La) that would require the Federal Reserve Board of Governors to have at least one member with community bank or community bank supervision experience.
In a statement of policy issued last year, the White House expressed serious concerns with the end-user provision, arguing that broadening Dodd-Frank's statutory exemptions is a complicated issue with serious implications for the health and stability of the financial markets.