U.S. House Agriculture Committee Passes Spanberger’s Bill to Shield Agribusinesses from Commodity Broker Bankruptcies, Improve Protections for Futures Customers
Bill Would Provide Greater Certainty in Cases of Bankruptcies, Simplify CFTC Regulations
Washington, October 30, 2019
WASHINGTON, D.C. – The U.S. House Agriculture Committee today passed U.S. Representative Abigail Spanberger’s bipartisan legislation to protect agribusinesses in the wake of commodity broker bankruptcies.
Currently, judges determine which assets are included in bankruptcy proceedings—but the case-by-case nature of these proceedings can leave agribusinesses uncertain about their financial futures.
Spanberger’s legislation would bring clarity to this often overcomplicated agribusiness finance system, which is regulated by the Commodity Futures Trading Commission (CFTC). To protect customers and provide them with greater certainty in cases of broker bankruptcy, her bill would allow futures customers to have a predetermined idea as to which commodity broker assets will be used to cover the costs of equity claims during bankruptcy proceedings. Spanberger’s legislation is included in H.R.4895, which reauthorizes the CFTC. The bill now awaits a vote on the House floor.
“Amid widespread trade worries, the American futures market currently faces tremendous financial uncertainty. In this unstable economic climate, agribusinesses in Central Virginia and across the country are always looking to better protect themselves against the consequences of unpredictable fluctuations in the market,” said Spanberger. “Today, the House Agriculture Committee passed my bill to bring more clarity to the CFTC’s commodity broker bankruptcy rules. By streamlining these regulations, we are giving producers more certainty as they look to expand their operations and invest in new facilities, equipment, and employees. I’d like to thank my fellow Committee Members for passing my bill today and for voting to reauthorize the CFTC, and I’ll keep working to advance legislation than can help protect the economic future of our rural communities.”
“Congresswoman Spanberger’s provision in the reauthorization legislation would give our country’s agribusinesses some much-needed peace of mind during bankruptcy proceedings, and I was glad to see her bill pass with strong bipartisan support,” said U.S. House Agriculture Committee Chairman Collin Peterson (D-MN-07). “Through her work on the Committee, Congresswoman Spanberger continues to display her commitment to her district’s ag producers, and I look forward to working with her on additional legislation that expands opportunity for folks across rural America.”
Spanberger’s bill is endorsed by the Virginia Agribusiness Council and the National Futures Association.
Spanberger’s bill would amend the CFTC’s authority to establish certainty for futures customers and market participants in cases of Chapter 7 bankruptcy proceedings. Specifically, her bill would require that a commodity broker’s cash, securities, or other property be classified as customer property to help pay the net equity claims of a broker’s public customers following the broker’s bankruptcy.
Spanberger is a member of the House Agriculture Committee’s Commodity Exchanges, Energy, and Credit Subcommittee, which provides oversight related to the CFTC.