WASHINGTON BUREAU — The Senate has agreed to ask members of the H.R. 4173 conference committee to adjust a proprietary trading provision in the bill.
The Senate passed H.R. 4173, the Wall Street Reform and Consumer Protection Act Thursday.
Originally, some had speculated that the House and Senate might take an informal approach to reconciling their versions of the bill, but congressional leaders are setting up a formal conference committee.
The Senate has appointed 7 Democrats and 5 Republicans to represent it in conference proceedings.
Members of the Senate have voted 87-4 to ask the conferencees to ask for an exemption from “Volcker rule” restrictions on proprietary trading for insurers that happen to own banks or thrifts.
The senate has told the conferees to try “to ensure that the Volcker Rule’s proprietary trading restrictions do not extend to the normal operations of insurance affiliates of insured depository institutions.”
The proposal was made by Sens. Kay Bailey Hutchinson, R-Texas, and Kay Hagan, D-N.C.
The narrow exemption appears to be enough for property-casualty insurers, which provide only limited investment services for their customers through insured financial institutions.
USAA, San Antonio, Texas, for example, enlisted its employees and members in a lobbying campaign seeking changes in the H.R. 4173 proprietary trading provision.
Large life insurers that operate limited trust banks and engage in asset management activities, private equity activities or mutual fund activities are seeking a broader exemption.