News...
                        sponsored by

Senate readies for key vote on Wall Street rules

Send a link to a friend

[May 19, 2010]  WASHINGTON (AP) -- An exhausted, occasionally cranky Senate is turning into the home stretch on a weekslong effort to pass a massive financial regulation bill.

HardwareSenators 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.

[to top of second column]

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.

[Associated Press; By JIM KUHNHENN]

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Nursing Homes

< Top Stories index

Back to top


 

News | Sports | Business | Rural Review | Teaching & Learning | Home and Family | Tourism | Obituaries

Community | Perspectives | Law & Courts | Leisure Time | Spiritual Life | Health & Fitness | Teen Scene
Calendar | Letters to the Editor