Manufacturers Disappointed Senate Rejects Chambliss/Shelby Amendment

05/13/10 -  The National Association of Manufacturers (NAM) Vice President of Tax and Domestic Economic Policy Dorothy Coleman issued the following statement today following the Senate’s vote on the Chambliss/Shelby Substitute Amendment (SA 3816) to S. 3217, the Restoring American Financial Stability Act:

“We are deeply concerned that senators today rejected the Chambliss/Shelby Substitute Amendment that would have explicitly exempted manufacturers and other business end-users from the financial reform bill’s costly and onerous regulations on derivatives.  Without this exemption, the cost of managing risk for manufacturers and other companies will increase by millions -- and in some cases billions -- of dollars, limiting their ability to drive economic growth and job creation.
 
Manufacturers of all sizes use customized over-the-counter (OTC) derivatives to manage the cost of borrowing or other risks of operating their businesses, including fluctuating currency exchange, interest rates and commodity prices.  These risk management tools help businesses keep operations going, invest in new technologies, build new plants and retain and expand workforces – especially in a challenging economy. 

While the NAM supports initiatives to prevent excessive speculation and improve transparency and stability in the derivatives market, we also want to see Congress preserve the ability of responsible companies to access OTC derivative products.  Preserving these critical tools would give manufacturers greater financial certainty and allow them to allocate resources to core business activities.

We have serious concerns that the end-user exemption in the current bill (S. 3217) is not strong or clear enough and could effectively eliminate the exemption for many companies, in some cases subjecting them to capital and margin requirements or higher costs.  We will continue to work with Congress to address these issues.”