Tags: us | financial | overhaul

Moderate Democrats Delay Bank Regulation Debate

Wednesday, 09 Dec 2009 04:53 PM

 

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WASHINGTON -- A moderate Democrat revolt Wednesday was delaying the start of debate on a vast overhaul of regulations governing Wall Street, as centrists sought to amend some of the bill's tougher provisions.

The internal Democratic dispute centered on whether Democratic leaders would permit moderates to offer amendments on the House floor that would alter certain regulatory provisions, particularly ones governing consumer protections and complex derivatives trades.

Without assurances that their changes would get a vote, moderates were threatening to withhold their support for letting the bill proceed, congressional officials said.

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Complicating the negotiations were changes that had already been granted to liberals and the likelihood they would get votes on some other of their preferences.

Democratic leaders feared that if some of the moderate amendments passed with Republican backing, the overall bill would lose appeal within the broader Democratic majority, thus imperiling its passage.

The Senate is not expected to act on its version of regulations until next year. Democrats wanted to make sure that amendments in the House did not weaken their hand when they have to reconcile bills with the Senate.

As proposed, the House bill hits big banks hardest, a response to public anger at the notion that some institutions had grown too big to fail and pushed the nation's financial system to the brink of collapse.

If the bill casts the largest banks as villains, it casts consumers as victims and provides for a new federal agency with regulatory and enforcement powers to oversee the public's dealings with lenders.

Moderates were seeking a chance to vote on amendments that would either eliminate a proposed Consumer Finance Protection Agency, a provision pushed by President Barack Obama, or eliminate the ability for states to enforce tougher state consumer laws.

Others wanted greater exemptions for firms trading in derivatives, the largely unregulated financial instruments blamed for accelerating last year's crisis.

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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