House/Senate conference begins contentious work on final financial reform bill
By Jon H. Harsch
© Copyright Agri-Pulse Communications, Inc.
Democrats and Republicans differed sharply, however, on what improvements are needed in the proposed “Restoring American Financial Stability Act of 2010.”
Republicans spoke out strongly in favor of adding provisions to deal with two institutions not covered in the merged bill being considered by the conference: troubled mortgage lenders Fannie Mae and Freddie Mac. Senate Banking Committee Chair Chris Dodd (D-CT) and House Financial Services Committee Chair Barney Frank (D-MA) who together preside over the conference dismissed this Republican complaint as based on “distorted history” and said Fannie and Freddie present complex issues which need to be dealt with in separate legislation rather than further complicate the present bill.
Republicans also charged that while the conference itself is being televised, the “Chairman’s Mark of H.R. 4173” prepared for the conference’s consideration was written “behind closed doors” without any opportunity for Republican input. They also noted that while the Chairman’s Mark is based on the Senate-passed bill, more than 350 pages were added “in the dark of the night.” Sen. Mike Crapo (R-ID) complained that there was “no red-lined copy” to show what changes had been made to the Senate-passed bill.
Dodd opened the conference by saying that he and Congressman Frank are committed to an “open, deliberate, and transparent process,” that the merged bill being considered includes a number of bipartisan amendments which improved the bill, and that “the minority can be as relevant as they choose to be in these discussions.”
Dodd promised that after two C-Span-televised weeks of conference on the bill, including “weekends if necessary,” he intends to deliver strengthened financial regulatory reforms “that will protect our economy for years to come.” He said major change is needed because “There has been a shocking loss of wealth in this country – trillions of dollars of wealth lost – lost incomes that will never be made up, lost home values that may never come back, retirement savings gone in a flash. . . These are problems we cannot walk away from. We must act.”
Dodd said the proposed bill focuses on these key objectives:
- “The bill will protect consumers from unsafe financial products, such as the subprime mortgages that led to the financial crisis.
- “It will end bailouts, ensuring that failing firms can be shut down without relying on taxpayer bailouts or threatening the stability of our economy.
- “It will create an advance warning system in the economy, so that there is always someone responsible looking out for the next big problem.
- “It will ensure that all financial practices are exposed to the sunlight of transparency, so that exotic instruments like hedge funds and derivatives don’t lurk in the shadows and businesses can compete on a level playing field.
- “And, most importantly, it will restore our financial security so that our economy can create jobs and offer middle class families a chance to build back the wealth they have lost.”
Dodd warned that despite lobbying efforts, “this bill, made so strong over the course of the last year, will not be weakened in the last throes of the debate.” He also warned that “Even as we sit here today, the rules of Wall Street have not changed and the same turmoil we saw in the fall of 2008 could emerge again if we fail to turn this legislation into law.”
Senate Banking Committee Ranking Member Richard Shelby (R-AL) voiced a very different view. He charged that “we are off to a rocky start” since the bill being considered “has already been decided by our Democratic colleagues behind closed doors. . . without any Republican input.”
Agriculture Committee Ranking Member Saxby Chambliss (R-GA) said that “We look
forward as Republicans in both the House and the Senate to working with our Democratic friends to produce a bill that will in fact address the egregious
circumstances that took place on Wall Street. But we need to make sure that we
don’t overreach down to not just
The conference’s opening day and opening statements ended with Barney Frank’s announcement that the conference will reconvene next Tuesday morning at 11 AM.
To read the 1,974-page merged “Chairman’s Mark of H.R. 4173” prepared for the conference, along with a summary and links to the separate House and Senate bills, go to: http://banking.senate.gov
To read what Sen. Blanche Lincoln (D-AR) said in the conference about new derivatives regulations, go to: www.agri-pulse.com/20100610H2_Lincoln_Derivatives.asp
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