Tags: US | Financial | Overhaul

Senate Readies for End Game On Wall Street Rules

Wednesday, 19 May 2010 06:49 AM

 

  Comment  |
   Contact  |
  Print   |
    A   A  
  Copy Shortlink

An exhausted, occasionally cranky Senate is turning into the home stretch on a weekslong effort to pass a massive financial regulation bill.

Senators were scheduled to vote Wednesday to end debate on the legislation. Still, several issues remained unresolved and tempers were running short on the Senate floor among Democrats who were unable to get votes on their amendments.

Republicans, many of whom have voted with Democrats on amendments to adjust the bill, escalated their criticism of the legislation, arguing it has gotten worse. In the words of Sen. Lamar Alexander, R-Tenn., the bill amounts to "another Washington takeover."

On Tuesday, one of the main casualties appeared to be an amendment by Democratic Sens. Jeff Merkley of Oregon and Carl Levin of Michigan that would force commercial banks to end their ability to conduct speculative trades on their own accounts. Large bank holding companies are fighting the effort.

Republicans objected to letting the amendment get a vote, prompting Levin to suggest he might vote against ending debate on the bill.

"The Republican leadership is obviously carrying Wall Street's water," Levin said.

The Senate bill represents the broadest rewrite of the rules governing Wall Street since the 1930s. A final vote is possible this week; the bill then would have to be merged with a House version.

The legislation would set up a mechanism to watch out for risks in the financial system, create a method to liquidate large failing firms and write new rules for complex securities blamed for helping precipitate the 2008 economic crisis. It also would create a new consumer protection agency, a key point for President Barack Obama.

Republicans and Democrats voted on a compromise Tuesday to roll back efforts to give states more consumer powers. The vote was a partial victory for federally chartered banks that don't want state regulators meddling in their business.

The proposal would let federal regulators override state laws on a case-by-case basis, compared to the blanket pre-emption they now employ. It also would let state attorneys general enforce regulations written by a federal consumer finance protection bureau.

Senate Banking Committee Chairman Christopher Dodd's underlying bill, however, would have given states more say on consumer protections.

Dodd also sought to break an impasse over how to regulate the complex securities known as derivatives. He offered a proposal that would require a two-year delay in the implementation of a contentious provision that would force banks to spin off their lucrative derivatives business.

But Sen. Blanche Lincoln, D-Ark., who has insisted on the spin-off measure, indicated she would oppose Dodd's effort.

"I remain fully committed to my provision and will fight efforts to weaken it," Lincoln said in a statement.

Her tough stance on derivatives came in the midst of a tough primary campaign as she was fending off criticism that she was too friendly to banks. On Tuesday, she failed to win a majority of votes in the contest, forcing a June 8 runoff with Lt. Gov. Bill Halter for her party's nomination.

The financial industry also was not ready to embrace Dodd's changes.

Because many derivatives contracts have a duration period of two years to five years, the two-year delay period in Dodd's amendment could create huge uncertainty now and have a chilling effect on banks, said John Dearie, executive vice president of the Financial Services Forum, an industry group.

Dearie said that would probably have the same effect that regulators have warned about in Lincoln's proposal — driving derivatives into unregulated markets.

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

  Comment  |
   Contact  |
  Print   |
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

Actor Booth Colman Dies at 91

Sunday, 21 Dec 2014 21:30 PM

Booth Colman, who had a long career as an actor including the role of ape scientist Dr. Zaius in the 1970s "Planet of th . . .

FSU Quarterback Jameis Winston Cleared in Campus Rape Hearing

Sunday, 21 Dec 2014 19:12 PM

Florida State University star quarterback Jameis Winston has been cleared in a student conduct code hearing looking into . . .

Satanic Temple Puts up Display at Michigan Capitol

Sunday, 21 Dec 2014 18:42 PM

Christians and Satanists put up competing displays Sunday on the Michigan Capitol grounds in Lansing as Christmas week g . . .

Most Commented

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved