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S. 3217: Dodd Financial Services Bill Heads To Floor

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S. 3217, a major Senate financial services bill, is on track to come up for discussion on the Senate floor Monday.

Starting about 3 p.m. Monday, the Senate will debate whether they should debate the bill, according to a Senate calendar posted by Senate Democrats Friday.

At 5 p.m. Monday, “the Senate will conduct a roll call vote on the motion to invoke cloture on the motion to proceed to S. 3217,” according to Senate Democrats.

Sen. Christopher Dodd, D-Conn., chairman of the Senate Banking, Housing and Urban Affairs Committee, filed a 1,408-page version of the bill April 15. He called that bill version he Restoring American Financial Stability Act of 2010 bill.

Dodd has been working on a compromise version of the bill with Sen. Richard Shelby, R-Ala., and others.

Senate Democrats are calling the version of the bill they will discuss Monday the Wall Street Reform Act bill.

Senate Majority Leader Harry Reid,D-Nev., tried unsuccessfully to persuade Republicans to let the bill come up for consideration without facing the threat of a filibuster. Senate Minority Leader Addison Mitchell McConnell Jr., R-Ky., criticized Reid for making the rquest while Democrats are still negotiating with Republicans about the content of the bill.

“I don’t think [negotiating] a bill with the legitimacy of a bipartisan agreement is a waste of time,” McConnell said, according to floor updates provided by the Senate Republicans. “This bill potentially affects every small bank and lending institution in our country.”

Reid assured McConnell that Republicans can offer amendments once the bill comes up on the floor.

“I’m not asking everybody approve the bill as written,” Reid said. “I’m asking we move to the bill.”

After McConnell and Reid sparred, Shelby expressed optimism about the possibility that he and Dodd can still come up with a compromise version of S. 3217.

“We’re continuing to negotiate, and we’re continuing to negotiate in good faith,” Shelby said. “Who knows what will happen between now and Monday or next Tuesday or Wednesday or Thursday. I hope it’s a bipartisan bill that we can gather a lot of people on both sides of the aisle. I think that’s one of our goals. But what is the main goal? To do it right.”

The version of S. 3217 filed April 15 includes sections that would create a Financial Stability Oversight Council with some ability to oversee nonbank financial companies; create an “orderly liquidation authority” for large, troubled financial companies; form an Office of National Insurance; promote uniformity in regulation of reinsurance and surplus lines coverage; create new derivatives markets regulations that might affect how insurers hedge credit and default risk; change the rules governing asset-backed securitization; overhaul rating agency rules; impose new executive compensation system rules; and create “senior investor protection” rules that would include annuity marketing standardes developed by the National Association of Insurance Commissioners, Kansas City, Mo.

The bill also would reorganize and consolidate the federal bank and thrift regulatory agencies; impose a federal regulatory system on hedge fund advisors; put new restrictions on banks’ capital markets activities; revamp securities arbitration system rules; increase the borrowing limit on Treasury loans; and establish a Bureau of Consumer Financial Protection that would not oversee insurance products.

The April 15 version of the bill would pave the way for future congressional action on some issues by calling for official studies on matters such as mutual fund advertising; conflicts of interest; financial professionals’ use of financial designations; the idea of requiring municipal bond issuers to give investors more information; and the idea of “harmonizing” the customer relationship standards that apply to brokers, dealers and investment advisors.

Democrats need support from at least 60 senators to have S. 3217 come up for a vote. Observers are speculating that at least one Republican, such as Sen. Scott Brown, R-Mass., might agree to vote for the bill, and then might have some ability to fine-tune the bill.

Senators have already been talking about the general idea of passing a financial services bill on the Senate floor this week.

McConnell said he believes the American people wonder whether the bill would kill jobs, continue to allow for bailouts, or allow the administration to “pick winners and losers.”

“At the end of the day, I need to look my constituents in the eye and prove to them that this bill does not allow any bailout,” McConnell said. “I need to prove to them that this bill doesn’t treat some favored groups better than others. I need to prove to them that this strengthens the economy, that it doesn’t make it worse.”


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