Pennsylvania lawmakers are moving forward with bipartisan legislation that would prohibit cities, towns and school districts throughout the state from entering into swap agreements.

The initiative to prohibit derivatives at the local level is in response to a state auditor general report released in mid-November. That report identified millions of dollars that the Bethlehem Area School District lost due to swap agreements, including a $12.3 million termination fee it made to JPMorgan in May 2009. Auditor general Jack Wagner has called for a ban on derivatives for all local governments.

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