CFTC Approves Rule Providing Relief for Swaps Dealers

The Commodity Futures Trading Commission voted today to expand the de minimis exception to the swap dealer definition for swaps entered into by insured depository institutions in connection with originating loans for their customers. Under the final rule, these swaps would not count toward the $8 billion notional threshold at which banks and other entities must register as swaps dealers.

The American Bankers Association—which has been a vocal supporter of the changes—welcomed the CFTC’s vote. “We applaud the CFTC for today’s final rule, which will facilitate the ability of insured depository institutions to help their customers manage risk by offering swaps in connection with their loans,” said ABA president and CEO Rob Nichols. “Today’s action—which ABA has long supported—will ensure businesses can retain these activities within the banking system rather than being forced into more costly alternatives to hedge risk. This action will further promote greater financial efficiency and economic growth within the parameters of sound risk management.”