White House vets candidates for CFTC commissioner vacancies amid Clarity Act negotiations

The White House has vetted candidates for the four open commissioner positions at the Commodity Futures Trading Commission, three people with knowledge of the matter told CNBC. When — or if — the White House will ultimately act on those potential candidates isn't clear.

The CFTC's five commissioners are mandated to be members from the political party in the White House and two from the opposing one. But at the moment, the CFTC — which regulates derivatives contracts — currently only has one, chairman Michael Selig.

The agency oversees regulation for futures, options and swaps markets. It also plays a key role in regulating novel asset classes, like cryptocurrency, and under Selig as the sole commissioner has taken an aggressive approach to defend what it sees as its sole right to regulate growing prediction market platforms.

Bloomberg News reported earlier this year bipartisan names that the White House was potentially considering for the open seats. In early July, the Trump administration sent a letter to Senate leadership claiming Democrats hadn't delivered recommendations for vacancies on both the CFTC and Securities and Exchange Commission, explaining why it had yet to fill openings on both Wall Street regulatory bodies.

Senate Minority Leader Chuck Schumer, D-N.Y., sent a letter at the end of July with suggestions for the open Democratic slots at both regulatory agencies.

"Democrats support having full, bipartisan commissions," a spokesperson for Schumer's office said in a statement. "We have done our part and sent the White House names for the Democratic vacancies on the CFTC and SEC." The spokesperson added the office hasn't heard anything back from the White House, and that if the administration has vetted candidates and is ready to place nominations, it should act quickly and work with Democrats.

The White House did not respond to a request to comment for this story.

CNBC could not verify the names of who Schumer sent or if they were included in the candidates vetted by the White House.

As the Senate looks to pass the Clarity Act, a cryptocurrency market structure proposal, Democrats — whose votes are needed to receive the required 60 to pass — have criticized the White House for leaving the spots reserved for Democrats on the SEC and four bipartisan slots at the CFTC empty. Democratic lawmakers have expressed concerns about approving the legislation that would delegate authority on digital assets between the two agencies while missing commissioners.

One of the people with knowledge of the vetting situation and a Republican working on Clarity noted that it would be a key concession by the White House to guarantee it will fill vacant spots on the CFTC in order to secure passage of Clarity. However, the issue is just one of many dragging out the legislative approval process, which include ethics concerns about President Donald Trump's family's crypto interests.

The Senate is set to have a key procedural vote on the Clarity Act on Sept. 15.

But even if it advances out of the Senate, the measure is unlikely to become law any time soon because Congress will be in session few days this fall due to this year's election. House Speaker Mike Johnson, R-La., on Thursday canceled votes for that chamber the final two weeks of September, as lawmakers are eager to spend more time in their districts and on the campaign trail.

The House is due back the same week as the Senate is expected to take up Clarity, but would have just two days to reconcile any differences it may have with the Senate version before members are due to leave town again. The schedule makes it likely that the legislation will slip until the lame duck period after November's election.

The Republican working on the law told CNBC that if the proposal doesn't get Senate approval, they expect the White House won't fill any of the four remaining commissioner seats at the CFTC, despite in its personal capacity preferring a full slate.

Selig has said the CFTC will embark on its own rulemaking if the legislation fails in Congress.

Calls for the White House to fill the four open commission slots at the CFTC have been bipartisan. In May, the House Agriculture Committee's chairman Rep. Glenn "GT" Thompson of Pennsylvania and ranking member Rep. Angie Craig of Minnesota called on Trump to nominate commissioners to the vacancies. The committee handles issues related to the CFTC in the lower house.

Craig reiterated that call in a statement to CNBC. "The Trump administration needs to ensure CFTC has the staff and resources it needs to fulfill its mission, and that includes a full bipartisan panel of commissioners."

On Tuesday, Thompson said that, similar to Schumer's office, he has yet to hear anything from the White House about potential nominations.

"I've had no feedback," he said. "But I truly believe that good governance means that the qualified people are put forth to be Senate confirmed to serve in those positions."