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Letter Urging Support of Feinstein Amendment to Energy Bill Requiring Greater Regulation of Derivatives in Wake of Enron Collapse

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Three of the nation's leading consumer groups, joined by a leading think tank on derivatives, today sent a letter urging Senators to support a derivatives re-regulation proposal expected to be voted on Tuesday as an amendment to the Senate energy bill by US Senator Dianne Feinstein (D-CA) and other Senators. The letter was signed by the Consumer Federation of America, Consumers Union, the Derivatives Study Center and U.S. PIRG. The Feinstein amendment would provide price transparency when energy derivatives are traded and give the Commodity Futures Trading Commission (CFTC) oversight authority for such transactions.

According to the letter, "Enron used over-the-counter derivatives extensively in order to hide the nature of just what it was doing to make money. Now, far too many former employees, investors and retirees are paying the price for Enron's desire to operate through murky, confusing, and unregulated transactions. In addition, energy company stocks are being roiled and they are having difficulty raising capital to fund investments in future energy production. Given the misunderstanding pervading the investor community over derivatives, and the quick and precipitous collapse of Enron, it is clear that derivatives merit closer scrutiny by federal regulatory authorities."

U.S. PIRG is the national lobbying office for the state Public Interest Research Groups. State PIRGs are non-profit, non-partisan public interest advocacy groups. More information about the PIRGs Consumer Program can be found at www.pirg.org/consumer/ more information about the PIRGs Campaign for A New Energy Future can be found at www.NewEnergyFuture.com.