The House and Senate will miss their deadline to send the financial services reform bill to President Obama for his signature by July 4. The House was scheduled to sail through a final vote on the bill’s passage late Wednesday, June 30. The Senate, however, has delayed taking up a final vote until it returns from recess on July 12.
Democratic negotiators on the bill had to briefly reopen the conference negotiations on June 29 after Senator Scott Brown (R-Massachusetts) said he would vote against the financial services reform bill unless a $19 billion tax on big banks that was inserted during the conference committee debate was deleted. Democratic negotiators conceded and removed late on June 29 the $19 billion tax that was designed to help fund the bill and instead opted to fund the Wall Street reform bill by ending the Troubled Asset Relief Program (TARP) and by charging an extra premium to large banks by the Federal Deposit Insurance Corp. (FDIC). “We end the TARP program immediately,” Senate Banking Committee Chairman Christopher Dodd said June 30 on the Senate floor.
But Washington, D.C.-based think-tank Concept Capital says that the new funding option for the bill “is worse for the big banks than the original [$19 billion tax] proposal as it excludes hedge funds, which means the industry bears the full brunt of the cost.” In addition, Concept Capital analysts say, “this leaves the door open for the Administration to come back with its original–and much bigger–bank tax. That tax could cost the banks about $10 billion a year compared to the original $4 billion assessment.” The banks that will be hit the hardest, the analysts say, are those “with between $10 billion and $50 billion of assets as they were exempt from the reform assessments but are covered by the higher FDIC premiums.”