(TNS) — Rep. Kevin Yoder’s measure allowing FDIC-insured banks to trade in some credit swaps has drawn an important critic: Tom Hoenig.

Hoenig, now vice chairman of the FDIC, is the former president of the Federal Reserve Bank of Kansas City, and was considered one of its more conservative members. He’s not happy with the effort from Yoder and others to repeal the Dodd-Frank ban on federally-insured banks using swaps.

“It is illogical to repeal the ... push out requirement,” Hoenig said in a recent statement.

The spending bill does just that.

Here are more excerpts from Hoenig’s statement of Dec. 10:

“In 2008 we learned the economic consequences of conducting derivatives trading in taxpayer-insured banks. Section 716 of the Dodd-Frank Act is an important step in pushing the trading activity out to where it should be conducted: in the open market, outside of taxpayer-backed commercial banks. It is illogical to repeal the 716 push out requirement...

“While the requirement applies to only about 5 percent of the notional amount of derivatives, that 5 percent represents more than $14 trillion and covers those derivatives where the greatest risk lies — uncleared credit default swaps (CDS), equity derivatives and commodity derivatives. This $14 trillion exposure represents about 83 percent of US gross domestic product. That total exposure is held mainly in three commercial banks.

“To put it in perspective, $4.6 trillion in CDS notional exposure is three times the amount that AIG had when it was bailed out at a cost of $85 billion. After its failure, AIG unwound over 35,000 CDS trades with a notional value exceeding $1.6 trillion.”