Bart Chilton, the colorful, mullet-sporting member of the Commodity Futures Trading Commission (CFTC), resigned this week, after casting a final vote to set position limits, which would regulate the number of commodity trades individual speculators can hold. Chilton’s farewell speech focused on his 5-year odyssey in support of a rule on position limits, which was finished, then overturned by the courts in 2012, then rewritten to answer the judicial challenges. He described it as his final piece of unfinished business. He also included a familiar farewell sentiment, which, in his case, was probably especially true: “It’s with incredible excitement and enthusiasm that I look forward to being able to move on to other endeavors.”
You can hardly blame Chilton for being excited to leave the CFTC. The chief regulator for over $300 trillion worth of derivatives trades has seen its operations squeezed by drastic underfunding, right at the time the Dodd-Frank financial reform law dropped a whole new set of responsibilities in its lap. While the rule-writing process is important—and Wall Street lobbyists have fought hard for exemptions and loopholes on derivatives rules—the lack of resources has made rules almost irrelevant, since the CFTC simply cannot enforce them. The agency is being hollowed out from the inside, yet another way that the financial industry can achieve its goal of gaining the freedom to ignore the law in pursuit of profit.