Commodity traders gain stronger claim to broker assets in bankruptcy
H.R. 9717 — Customer Property Protection Act · Filed by Shri Thanedar (D-MI) · 1 cosponsor · Introduced Jul 15, 2026 · Referred to committee
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What it does
This bill amends the Commodity Exchange Act to expand what counts as 'customer property' during a commodity broker bankruptcy. When a broker fails, certain assets from the broker's own estate—including cash, securities, trading accounts, and commodities inventory—can now be used to pay customer claims, but only if the broker's designated customer property is insufficient to cover what customers are owed. The change prioritizes customer recovery over other creditors' claims on the broker's assets.
Why we flagged it
The bill's sole operative mechanism is to expand the pool of assets available to satisfy customer claims during commodity broker insolvency. It is a straightforward creditor-priority amendment favoring retail customers over general creditors.
What the text implies
- Broker-dealers and clearing organizations may face higher capital or reserve requirements if regulators interpret this as increasing contingent liability exposure during stress scenarios.
- The phrase 'subject to any otherwise unavoidable security interest' preserves lender and clearing-organization liens, meaning secured creditors retain priority even within the expanded customer-property pool—the benefit to customers is limited to unsecured broker assets.
The full analysis lists 3 implications of this text.
Who stands to gain
retail commodity traders and hedgers; small agricultural producers using commodity futures for price protection