Senate Democrats’ Amicus Brief Sides with CFTC in ISDA v. CFTC

Nineteen Senate Democrats led by Senator Carl Levin have filed an amicus brief asking the U.S. Circuit Court of Appeals for the District of Columbia to overturn a federal district court decision that vacated the CFTC’s position limit rules issued under Dodd-Frank, ISDA v. CFTC, 887 F. Supp. 2d 259 (D.D.C. Sep. 28, 2012). The Senate Democrats’ brief argues that Congress did not intend to require the CFTC to make a necessity finding before implementing position limits, but rather to promulgate such limits within the tight deadlines specified in the statute. Their argument supports the notion that, in issuing its rules, the CFTC did not have the discretion to alter an express mandate from Congress: “Congress chose to direct the agency to establish position limits within a set period, chose to do so unconditionally, and chose to describe those limits as ‘required.'” Under this mandatory regime, according to the brief, the only discretion that the CFTC could exercise was with respect to the level of position limits.

Lofchie Comment: Why would Congress and the CFTC not want to consider all of the economic research on this subject that has already been done?  If we don’t want the regulators to consider economic analyses before adopting rules, what is the point of FSOC and of Form PF and of all the information that the regulators now require?  When Congress mandates that hundreds of millions of dollars be spent collecting financial information, and then regulators argue that rules should be adopted without even considering the information that we already have available, something in the regulatory or legal structure needs fixing.

See: Brief for Senators Levin, Begich, Blumenthal, Boxer, Sherrod Brown, Cantwell, Cardin, Feinstein, Harkin, Manchin, Mccaskill, Menendez, Mikulski, Bill Nelson, Sanders, Shaheen, Warren, Whitehouse, and Wyden as Amici Curiae in Support of Appellant CFTC.