Fulfilling a threat made last month, House Banking Committee Chairman Jim Leach has scheduled a hearing for July 17 on a bill that prevents the Commodities Futures Trading Commission from regulating derivatives.

The Iowa Republican said the CFTC refused to sign a compromise he brokered with the Federal Reserve Board, Treasury Department, and Securities and Exchange Commission regarding regulation of over-the-counter derivatives.

The deal would have prevented the CFTC from supervising OTC derivatives, but it could continue to solicit comments on its regulatory proposal.

The CFTC has asserted its right to regulate this market, which is dominated by banks and previously has been overseen by the federal banking and securities agencies.

"The CFTC, in a controversial stretch of law and against the advice of Treasury, the Fed, and the SEC, has unilaterally upset a delicate jurisdictional balance," Rep. Leach said. "The implication of this circumstance demands legislative review."

The committee has not yet released a witness list for the hearing. -Jaret Seiberg

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