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Looking forward on FinReg

Wondering what happens next for the Restoring American Financial Stability Act of 2010?

Right now, [Senate Majority Leader Harry] Reid has indicated he will allow a vote on Sen. Sam Brownback’s (R-Kans.) amendment barring Consumer Financial Protection Agency from enforcing rules on autodealers making car loans. He will also allow a vote on a secondary amendment attached to Brownback’s, Sens. Jeff Merkley (D-Ore.) and Carl Levin’s (D-Mich.) provision on the Volcker Rule, barring banks from risky proprietary trading. Right now, the fates of those two amendments are intertwined. If Brownback is not passed, no dice for Merkley-Levin. Republicans will attempt to table the Merkley-Levin secondary amendment. Merkley and Levin will attempt to get their amendment considered by itself.

Other senators might lobby to have their amendments come up for a vote — notably Sen. Susan Collins (R-Maine), who wants to strengthen capital requirements, and Sen. Maria Cantwell (D-Wash.), who wants to fix holes in Sen. Blanche Lincoln’s (D-Ark.) derivatives language and has offered an amendment with Sen. John McCain (R-Ariz.) to impose Glass-Steagall-type provisions barring combined commercial and investment banks. But, right now at least, Senate staffers say Brownback and Merkley-Levin will be the only amendments getting an up-or-down.

Then, today or tomorrow, the Senate will vote on and presumably approve the Dodd bill. Next up: conference committee.

The difficulty Merkley and Levin have had getting a vote on a real Volcker rule is interesting. The Volcker rule was one of the few specific elements of this package that Barack Obama publicly and specifically supported. In fact, everyone learned about it when Obama held a news conference next to Paul Volcker, where he announced the Volcker rule and used it to resuscitate interest in financial reform.

But if the White House were really so intent on seeing this provision enter the bill in a strong way, Merkley and Levin wouldn't be having to scrap and beg for consideration. When the Volcker rule was announced, the reports suggested that Tim Geithner and Larry Summers weren't supportive of the provision but had lost that internal battle. Now it looks like they won a compromise: The Dodd bill gestures toward a Volcker rule and tells the regulators to figure something out, and the White House seems content with letting that be the language rather than pushing the Merkley-Levin amendment into the law.

By Ezra Klein  |  May 20, 2010; 5:58 PM ET
Categories:  Financial Regulation  
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Next: Reconciliation


Typical Obama. Says he supports something then walks away and does nothing.

Posted by: thomas_raftery | May 20, 2010 7:04 PM | Report abuse

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