June Confirmation Vote for CFTC Nominees

Senate Democrats plan to vote next month to fill the three of five commissioner seats that are currently open.

The U.S. Senate plans confirmation votes early next month for three commissioners to serve on the main derivatives regulator, a panel that has been slowed this year without a permanent chairman or full roster of members.

Senate Democratic leaders will push to confirm Treasury Department official Timothy Massad as chairman of the Commodity Futures Trading Commission (CFTC) and two other nominees as commissioners, according to a leadership aide who requested anonymity in discussing the scheduling of the votes.

Majority Leader Harry Reid took a procedural step yesterday to end debate and advance the confirmation of one of the CFTC nominees, Sharon Y. Bowen, who has faced Republican opposition.

Confirmation of Massad, Bowen, and J. Christopher Giancarlo, the third nominee, would bring the CFTC up to a full complement of five members overseeing much of the $710 trillion global swaps market and futures traded on exchanges owned by CME Group Inc. and IntercontinentalExchange Group Inc.

The commission has been in a period of transition as it implements expanded oversight of swaps under the 2010 Dodd-Frank Act. The agency is overseeing more than 60 new regulations designed to reduce risk and increase price competition in the market as part of the law enacted in response to the 2008 credit crisis.

While the CFTC’s duties have expanded, its budget has grown little in recent years. President Barack Obama has requested a budget of $280 million—up from $215 million—to increase the agency’s staff of about 700 employees and to add technological capabilities to oversee markets.

Gary Gensler stepped down as commission chairman when his term ended in January, and Bart Chilton left in March. Jill E. Sommers stepped down as a commissioner last year. Mark P. Wetjen, a Democrat, is the commission’s acting chairman, serving alongside member Scott O’Malia, a Republican.


Vitter’s Complaint

Bowen, a partner at Latham & Watkins LLP, has faced opposition from Republicans for her oversight of a panel that ruled against compensation for victims of R. Allen Stanford’s fraud. Bowen is the acting chair of the Securities Investor Protection Corp. (SIPC), an industry-funded nonprofit that seeks to protect customers of failed brokerages.

Senator David Vitter, a Louisiana Republican, has sought to hold up Bowen's confirmation. He said in April that “under Bowen’s leadership, SIPC has completely failed to protect the Stanford Ponzi scheme victims, instead siding with its Wall Street members.”

Vitter has sent several letters to Bowen, including one dated May 21, seeking information about SIPC’s rulings on the Stanford fraud. Stephen Harbeck, president of SIPC, said yesterday that Vitter would receive a response “in short order.”

Senator Saxby Chambliss, a Georgia Republican, said in April that he opposed Bowen’s confirmation because he doesn’t think she is qualified for the job.

Reid, a Nevada Democrat, filed the procedural motion yestderday to end debate on Bowen’s confirmation and set the stage for the final Senate vote on her next month. Votes on the other two nominations also would be held then, according to the Senate aide.

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