House members today agreed by a voice vote to keep the Financial Industry Regulatory Authority from regulating investment advisors that are associated with broker-dealers.
House Financial Services Committee Chairman Barney Frank, D-Mass., and Rep. Steve Cohen, D-Tenn., introduced the amendment to H.R. 4173, the 1,279-page Wall Street Reform and Consumer Protection Act of 2009 bill. The amendment would “strike language that would permit FINRA to regulate investment [advisors] that are associated with broker-dealers,” according to a summary posted on the House Rules Committee website.
Frank created the package to serve as a vehicle for getting many major financial services bills, including a systemic risk regulation overhaul, an overhaul of derivatives market regulation, consumer protection measures, a measure restricting executive compensation, and a measure that would create a Federal Insurance Office, through the House quickly.
House members agreed Wednesday to let the financial services package come up on the floor, and action heated up Thursday. House leaders to wrap up work on the package today.
Lawmakers voted 240-182 Thursday to approve a manager’s amendment, offered by Frank, that would make many changes in the bill. Many of the changes would require federal financial services agencies, such as the Federal Reserve Board and a proposed Financial Services Risk Oversight Council, to coordinate their activities with the Federal Insurance Office when they are dealing with insurance companies.
The amendment also would change the systemic risk section of H.R. 4173 to provide that federal regulators would have to follow state law when “resolving” a troubled, state-regulated insurer.
A provision on page 126 of the amendment PDF would require states to adopt annuity suitability standards that are at least as strict as those given in the Suitability in Annuity Transactions Model Regulation that was created by the National Association of Insurance Commissioners, Kansas City, Mo.
The amendment also includes many references to investment advisors.
During floor debate, House members talked mainly about provisions that would affect banks, the housing market and general economic conditions.