​House Panel Passes Derivatives Clearing Relief for Small Banks

The House Agriculture Committee yesterday passed a reauthorization bill for the Commodity Futures Trading Commission. ABA successfully advocated for the inclusion of an amendment that would provide an exemption for derivatives clearing for small bank holding companies.

The amendment, which was added to the bill by a voice vote, provides a fix for a technical error in the Dodd-Frank Act that exempted depository institutions with under $10 billion in assets from derivatives clearing requirements but not their holding companies.

Banks that use swaps — for example, to hedge interest rate risk — often do so at the holding company level, and 94 percent of banks with under $10 billion in assets that use swaps have a holding company. For more information, contact ABA’s Ed Elfmann.