Assessing the Regulatory, Economic and Market Implications of the Dodd-Frank Derivatives Title

Congresswoman Maxine Waters (D-Calif.), a senior member of the Committee, delivered the following remarks.

"Thank you, Mr. Chairman.

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Public Law 111-203) was designed to address the lack of transparency and capital in the derivatives market to prevent the industry and its clients from needing another taxpayer funded bailout. Specifically, the legislation calls for the SEC and the CFTC to regulate the OTC derivatives market, to pre-approve contracts before clearinghouses can clear them, and to punish bad actors. In fact, the Dodd-Frank Act charges the SEC to promulgate 7 rules to implement reforms to the OTC market.

Unfortunately, the Continuing Resolution that we will debate on the House floor today cuts funding to the SEC by $178 million. Such a cut would not only limit the SEC's ability to implement the reforms required by Dodd-Frank, but would also restrict the Commission from carrying out its day-to-day activities. The SEC would be forced to lay off hundreds of staff and as a result our financial markets— including the derivatives market—would be un-policed and effectively unregulated. In effect, the Continuing Resolution would take Wall Street's cop—its only cop—off the beat.

Mr. Chairman, while I appreciate this hearing, I believe that we must focus on making sure that our agencies have the resources they need to monitor and regulate our financial markets, especially those as complex as the OTC derivatives market. If we don't, we risk a crisis that will eclipse the collapse of our financial market in 2008.

Thank you, Mr. Chairman. I yield back the balance of my time."