US lawmakers open final Wall Street overhaul drive
WASHINGTON Ã¢â‚¬â€ Key US lawmakers crafting the most sweeping finance industry overhaul since the Great Depression of the 1930s vowed Thursday to resist any “last-minute lobbying blitz” to weaken the bill.
Delegates from the Senate and House of Representatives held their first “conference” meeting aimed at melding the two chambers’ rival versions of the legislation into a compromise congress could send to President Barack Obama.
House Financial Services Committee Chairman Barney Frank and Senate Banking Committee Chairman Chris Dodd, both Democrats, have said they aim to get the president a final bill before lawmakers leave for their July 4 break.
As the discussions began, Dodd said he had “a warning to those who still hold out hope we will, at the end of the day, let our bill be weakened by a last minute lobbying blitz” that they would be disappointed.
“This bill, made so strong over the course of the last year, will not be weakened in the last throes of the debate,” he said. “This is a very strong bill and it is time we get it on the president’s desk.”
Stubbornly high US unemployment and painful aftershocks from the 2008 global financial meltdown pressured lawmakers to resist any substantial weakening of the legislation, Obama’s top domestic priority.
At the same time, Obama’s fellow Democrats in the Senate and their two independent allies held only 59 seats, and 60 were needed to ensure passage over any parliamentary delaying tactics, suggesting at least some changes would be necessary to draw some Republican support for the sweeping bill.
“I welcome constructive input as we work to finalize the essential reforms we need to ensure the long-term stability of our financial system. But I will not weaken this bill,” said Dodd.
The senator from Connecticut, who is not seeking reelection, warned that “the rules of Wall Street have not changed and the same turmoil we saw in the fall of 2008 could emerge again if we fail to turn this legislation into law.”
Both versions of the bill aim to curb Wall Street excesses blamed for the 2008 collapse, and dramatically expand the government’s ability to dissolve a failing firm whose collapse threatens the broader economy.
The goal was to eliminate taxpayer-funded bailouts of companies deemed “too big to fail.”
The House bill creates an unprecedented consumer financial protection agency, independent of the US Federal Reserve, and notably exempts auto dealers who provide loans to their customers, while the Senate bill places the agency under the Fed’s umbrella and does not exempt auto dealers.
One issue in question was how far to curb banks’ lucrative, largely unregulated trading in complex financial instruments called derivatives.
Senate Agriculture Committee chair Blanche Lincoln, a Democrat, authored a measure in the bill that aims to force big banks to end their derivatives work, a step forcefully opposed by the banks and their army of lobbyists.
Dodd reportedly indicated support Wednesday for keeping Lincoln’s proposal after she narrowly won a Democratic primary run-off.
On Thursday, he said the legislation would “ensure that all financial practices are exposed to the sunlight of transparency, so that exotic instruments like hedge funds and derivatives don’t lurk in the shadows.”