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Financial Planning > Behavioral Finance

Panel Making Progress On Financial Services Package

By Arthur D. Postal

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WASHINGTON BUREAU — Senate Banking, Housing and Urban Affairs Committee leaders say they hope to resolve remaining concerns about financial services reform legislation by the time the Senate reconvenes in January.

Sen. Christopher Dodd, D-Conn., chairman of the committee, and Sen. Richard Shelby, R-Ala., the highest ranking Republican on the committee, joined to issue a statement on their bipartisan financial services efforts on Christmas Eve, as the Senate was holding a party-line vote on the Senate health bill.

“For the last few weeks we, and other members of the Banking Committee, have been engaged in serious negotiations, with the goal of producing a bill that strengthens our regulatory structure and makes our economy more secure,” Dodd and Shelby say in the joint statement.

“These talks have been extremely productive, with members providing great insight and demonstrating a desire to get this done and get this done right,” Dodd and Shelby say. “We share many of the same goals.”

Here is a list of their goals:

- “We seek to end ‘Too Big to Fail.’”

- “We need to protect American taxpayers from future bailouts by enhancing our resolution regime.”

- “We agree that consumer protections need to be strengthened.”

- “We believe that our regulatory structure needs to be modernized and streamlined while preserving the dual-banking system.”

- “We agree that the Federal Reserve should be more focused on its core responsibility – conducting monetary policy.”

- “And finally, we need to modernize regulation and oversight of the derivatives market.”

Jack Dolan, a spokesman for the American Council of Life Insurers, Washington, says the ACLI “looks forward to continuing to work with Dodd and Shelby as they hammer out the details of financial services regulatory reform legislation.”

The “ACLI shares the senators’ goals of protecting consumers and strengthening the overall financial services system and will continue providing life insurers’ input and expertise as they and the entire committee develop their reform proposal,” Dolan says.

When the House developed its financial services package, leaders there included insurers in a systemic risk oversight system that would require all financial services companies with more than $50 billion in assets to help prefund a resolution authority. The resolution authority would be used to wind down large, troubled financial institutions.

One ACLI priority has been to keep the Senate from including insurers in any systemic risk oversight proposal.

The ACLI also will be lobbying for the Senate to include a provision in its financial services bill that would create a Federal Insurance Office within the Treasury Department.

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