More than 70% of commenters are against proposals contained in the Federal Reserve Board's Notice of Proposed Rulemaking regarding financial holding company involvement in commodities (NOPR). 1 (There were 39 submissions posted as of 1-59 PM, Feb. 24, 2017, one of which was not responsive, and a couple of which were follow-up letters. So, the >70% figure comes from 26 out of 35. It is also worth noting that some comment submissions were signed jointly by more than one organization.) The NOPR follows an Advance notice of proposed rulemaking 2 and Senate subcommittee hearings in 2014 (see timeline).
Update(2017 Feb 28, 9-57 AM): SIFMA's 2-17 letter now posted (commenters' submissions post on the FRB's website slower than molasses), bringing the total # of (posted) submissions to 40.
Update (2017 Mar 02, 12-41 PM): several more letters have been posted. Will detail submissions further in next post.
One of the comment letters submitted in response to the NOPR was from U.S. Senators Sherrod Brown, Jeff Merkley, and Jack Reed. It expressed support for the proposed rule and presented various arguments. The text highlighted in yellow in the screen capture below is part of just one of the arguments, but it comes out looking a bit funny. "Morgan Stanley's jet fuel supply activities assisted the airline while the parent corporation was going through bankruptcy proceedings." So, is the takeaway that this was a bad thing? Like, we don't want to see any more assistance like that again? Or, maybe it’s a good thing, but its part of an argument against bad things, and we don’t want those kind of good things. (Naturally, not every argument is going to be a winner.)
The Senators' letter was addressed to Janet Yellen. It cc'd Robert deV. Frierson, Secretary, Board of Governors of the Federal Reserve System. That would appear to have been a considerate thing to do except that the instructions for the NOPR are pretty clear about who the comments are to be submitted to--Robert deV. Frierson, Secretary, Board of Governors of the Federal Reserve System. He's the one who's name is specified in the mailing address in the beginning of the NOPR, he is also the contact specified to whom any comments related to the Paperwork Reduction Act should be sent, and his name is also on the closing of the NOPR (under the text "By order of the Board...") as representing the Board--he's pretty much the point person on the NOPR. Can one be forgiven for thinking that there's a little bit of 'tude here? Kind of feels like they are trying to go over the Secretary's head--straight to the Chair. I understand that they are in very high positions and its not wrong to want to talk to someone else in a high position, like the one in charge, so-to-speak. But, Janet Yellen's name doesn't appear anywhere in the NOPR, and except for the submission of one scholarly article that was not addressed to anyone and for one submission made via electronic form, all other commenters, including U.S. Representative, Bradley Byrne, addressed their submissions to Secretary Robert deV. Frierson.
Separately, but not unrelated, Jeb Hensarling, Chairman of the House Financial Services Committee, and 33 other members of the U.S. House of Representatives, sent a succinct letter yesterday to Janet Yellen, Chair of the Federal Reserve Board. The letter refers to Janet Yellen's recent testimony about a possible rulemaking related to stress tests, and the letter cites a section of the Dodd-Frank Act regarding the appointment of a Vice Chairman for Supervision to explain that the Federal Reserve shouldn't propose or adopt any new rules until such appointment is made as required by the Act. It goes on to note the ability to take appropriate action to overturn rules pursuant to the Congressional Review Act. This presents an interesting contrast to the last line of the Senators' letter regarding the NOPR, which states "and we hope that you will move forward in finalizing your rules without any further undue delay."
1. Federal Reserve System, Regulations Q and Y; Risk-Based Capital and Other Regulatory Requirements for Activities of Financial Holding Companies Related to Physical Commodities and Risk-Based Capital Requirements for Merchant Banking Investments, Notice of proposed rulemaking, 81 Fed. Reg. 67220 (Sep. 30, 2016), avail. at https://www.gpo.gov/fdsys/pkg/FR-2016-09-30/pdf/2016-23349.pdf
2. Federal Reserve System, Complementary Activities, Merchant Banking Activities, and Other Activities of Financial Holding Companies Related to Physical Commodities, Advance notice of proposed rulemaking, 79 Fed. Reg. 3329 (Jan. 21, 2014), avail. at https://www.gpo.gov/fdsys/pkg/FR-2014-01-21/pdf/2014-00996.pdf