House and Senate split on derivatives

Senate Democrats are considering ways to crack down on the multitrillion-dollar derivatives market that were already overruled on the House floor in December.

If Senate Democrats push forward, they could set up a major battle with House members. Sen. Blanche Lincoln (D-Ark.), chairwoman of the Senate Agriculture Committee, said she wants to give regulators power to ban "abusive swaps" and create a "narrow exemption" for end-users of derivatives.

Those efforts and others could diverge sharply with a series of votes on the House floor in December:

- The House opposed an amendment from Rep. Bart Stupak (D-Mich.) to ban "abusive swaps." The vote was 150 to 279.

- The House approved an amendment from Rep. Scott Murphy (D-N.Y.) to grant an "end user" exemption for companies that use derivatives that are not deemed systemically important. The House approved the amendment on a 304-124 vote. The amendment was opposed by 124 Democrats, including House Financial Services Committee Chairman Barney Frank (D-Mass.). But 131 Democrats joined 173 Republicans on the floor in support.

- The House opposed an amendment from Rep. Bart Stupak (D-Mich.) that sought to boost transparency in the market by requiring all non-cleared swaps to be executed on a registered swap execution facility. The amendment failed 98 to 330.

- The House opposed an amendment from Frank that would have given regulators power to set margin requirements in swaps and security-based swaps involving end-users. The amendment failed 150 to 280.