Last Minute Amendment Could Have Shut Down Precious Metals Coin Dealers
ICTA recently helped defeat an 11th hour proposal that would have put precious metals dealers under the jurisdiction of the CFTC which may also have led to federal licensing and further regulation of the industry.
In late April, during Senate consideration of the 2008 farm bill (HR 2419), a section was added to reauthorize the Commodity Futures Trading Commission (CFTC) and amend the Commodity Exchange Act (CEA).
The House Agriculture Committee marked up similar legislation, so the two CFTC bills were both being considered by the joint Senate/House Conference Committee that would recommend the final bill.
A last minute amendment was introduced at the Conference Committee by Senator Tom Harkin (D-IA) that would have expanded the CFTC’s jurisdiction beyond the futures markets to include the cash markets.
Had this amendment been accepted, it could have radically changed the manner in which the rare coin/precious metals market functions. In addition, the proposed CFTC jurisdiction could have led the way for CFTC licensing and trading restriction requirements would have affected almost every dealer who sells precious metals including not just bars but certain coins as well.
ICTA worked with lobbyists for the Coalition for Equitable Regulation & Taxation (CERT) and others to inform the Conference Committee legislators of the disastrous impact that this amendment would have on the precious metals industry, including creating an unnecessary second layer of oversight by yet another governmental agency (the CFTC), since cash markets are currently overseen by the Federal Trade Commission (FTC).
After two weeks of intense lobbying, the industry’s position had been accepted, and as every House conferee opposed it, Senator Harkin’s amendment was dropped.
Senator Harkin’s amendment was intended to address what he considered to be a loophole in commodity trading oversight resulting from a case that involved fraud in certain foreign exchange transactions. Senator Harkin has been passionate about this issue, and ICTA and CERT will be on alert and fight any attempt to resurrect this amendment in the future.
Industry Council for Tangible Assets (ICTA) is the national trade association for rare coin, currency, and precious metals dealers. Contact ICTA at 410-626-7005; 410-626-7007 (fax); or www.ictaonline.org.
What Does ICTA Do?
ICTA works to prevent laws and regulations that would interfere with the ability to do business and/or are excessively burdensome. ICTA also is proactive in proposing laws that would benefit the hobby and business. Equally important, ICTA educates dealers on compliance with certain laws and regulations.