Banking/Financial Institutions

Sen. Maria Cantwell (D-Wash.) said Thursday that she will vote to support Wall Street overhaul legislation, moving Senate Democrats to the brink of winning the support necessary to pass the bill.

Cantwell had opposed an earlier version of the legislation. Her support is crucial as Senate Democrats look to shore up the 60 votes necessary to overcome procedural hurdles. The House passed the same legislation on Wednesday.

“I will vote in support of the conference report because it makes great strides toward our ultimate goal: bringing all standard derivatives onto exchanges and clearinghouses, with aggregate position limits and strong anti-manipulation tools,” Cantwell said in a statement.

Three Senate Republicans -- Susan Collins (Maine), Olympia Snowe (Maine) and Scott Brown (Mass.) -- voted to end debate on the bill in May. Collins said this week she would suport the legislation. Snowe and Brown have yet to announce how they will vote.

With support from Collins and Cantwell, Senate Democrats have 58 votes in favor of the bill. Sen. Russ Feingold (D-Wis.) remains opposed to the bill. Democrats would likely secure another vote in support when the Democratic governor of West Virginia names a replacement for the late Sen. Robert Byrd (D-W.Va.).

"This legislation is not perfect, and I will continue to push for even bolder action – including a return to the Glass-Steagall separation of commercial and investment banking – to reign in Wall Street, put an end to the concept of ‘too-big-to-fail.’ But this bill makes significant strides toward preventing the kind of financial meltdown that we saw in the fall of 2008," Cantwell said.

Democrats are taking steps to clarify a controversial provision in the Wall Street overhaul that sparked concerns among businesses that use derivatives to hedge risks.

Business groups have warned that the wording of the derivatives title could require so-called "end users" of derivatives to post hundreds of billions of dollars of collateral for their trades. The International Swaps and Derivatives Association (ISDA) said this week the collateral requirements would total roughly $400 billion for current market levels.

Earlier versions of the legislation explicitly exempted commercial end users, but business groups said the final conference report language is unclear on the point.

Rep. Collin Peterson (D-Minn.), chairman of the House Agriculture Committee, said Thursday that argument is a "misinterpretation" of the bill. "Nowhere in this section do we give regulators any authority to impose capital and margin requirements on end users," Peterson said on the House floor.

Senate Banking Committee Chairman Chris Dodd (D-Conn.) and Senate Agriculture Committee Chairwoman Blanche Lincoln (D-Ark.) wrote a four-page letter this week clarifying the intent of the legislation.

"Congress clearly stated in this bill that margin and capital requirements are not to be imposed on end users, nor can regulators require clearing for end user trades," the wrote.

For derivatives trades that are not cleared through central clearinghouses, Dodd and Lincoln wrote that margin requirements should be placed on the dealer side of the transaction rather than the end-user side.

The Treasury Department on Thursday announced it has so far sold approximately 2.6 billion shares of Citigroup common stock and grossed roughly $10.5 billion from the sale. The average price per share is $4.03.

Democratic efforts to overhaul Wall Street drew stronger support Wednesday than in December.

The legislation passed Wednesday on a 237-192 vote, with three Republicans in support and 19 Democrats opposed. In December, an earlier version of the legislation passed 223-202, with no Republicans in support and 27 Democrats opposed.

Republicans supporting and Democrats opposing the June legislation:

Three Republicans support the bill:

Reps. Joseph Cao (La.), Walter Jones (N.C.) and Mike Castle (Del.)

19 Democrats oppose the bill:

Reps. Marion Berry (Ark.), Dan Boren (Okla.), Rick Boucher (Va.), Bobby Bright (Ala.), Ben Chandler (K.y.), Travis Childers (Miss.), Jim Cooper (Tenn.), Mark Critz (Pa.), Henry Cuellar (Tex.), Lincoln Davis (Tenn.), Chet Edwards (Tex.), Marcy Kaptur (Ohio), Ann Kirkpatrick (Ariz.), Mike McIntyre (N.C.), Harry Mitchell (Ariz.), Bill Owens (N.Y.), Tom Perriello (Va.), Mike Ross (Ark.) and Ike Skelton (Mo.).

Four members did not vote:

Reps. Gene Taylor (D-Miss.), Lynn Woolsey (D-Calif.), Zach Wamp (R-Tenn.) and Don Young (R-Alaska).

Here is a breakdown of the changes between December 2009 and June 2010:

Republicans move to support the bill:

Reps. Joseph Cao (La.), Walter Jones (N.C.) and Mike Castle (Del.) switched their votes to support the legislation.

Democrats switching from 'no' to 'yes':

Reps. Debbie Halvorson (Ill.), Baron Hill (Ind.), Dennis Kucinich (Ohio), Solomon Ortiz (Tex.), Kurt Schrader (Ore.), Zack Space (Ohio), Bart Stupak (Mich.), Harry Teague (N.M.) and Pete Visclosky (Ind.) switched their votes to support the bill.

Democrats switching from 'yes' to 'no':

Reps. Travis Childers (Miss.), Jim Cooper (Tenn.) and Bill Owens (N.Y.) dropped their support for the bill.

Switched parties or resigned from Congress:

Rep. Parker Griffith (Ala.) switched parties from Democrat to Republican. Griffith voted against the bill on both votes.

Eric Massa (N.Y.) resigned his seat in March. Massa had voted against the legislation in December.

From 'no' to 'not voting':

Rep. Gene Taylor (D-Miss.) and Zach Wamp (R-Tenn.) 

From 'not voting' to 'yes':

Reps. Tammy Baldwin (Wis.), Zoe Lofgren (Calif.), Stephen Lynch (Mass.), Jim Moran (Va.), Jim Oberstar (Minn.), Charles Rangel (N.Y.) and Louise Slaughter (N.Y.).

Investment advisers who make political contributions to gain pension business will be restricted from managing funds in an effort to curb abuses in the municipal securities market. 

The Securities and Exchange Commission on Wednesday voted unanimously to restrict "pay-to-play" practices of making campaign contributions to elected officials to influence the awarding of contracts for the management of the $2.6 trillion public pension fund industry. 

The rule, approved 5-0, bars investment managers who make political contributions from managing those funds for two years.

"The selection of investment advisers to manage public plans should be based on the best interests of the plans and their beneficiaries, not kickbacks and favors," said SEC Chairman Mary Schapiro. "These new rules will help level the playing field, allowing advisers of all sizes to compete for government contracts based on investment skill and quality of service."

The former executive said decisions after his tenure led to the company's problems.

The conference report wins one more supporter, but the Senate won't consider it until mid-July.

Sen. Scott Brown said he'd "continue to review" a Wall Street reform bill over next week's congressional recess.

The complaints from Sen. Brown and others forced the conference to reconvene Tuesday evening.

Democrats acknowledged Tuesday that their deadline for passing Wall Street reform was likely to slip past this week.

White House Press Secretary Robert Gibbs said at his daily press briefing that reform has become a matter of when, not if, but he conceded "it will more likely get done the week they get back than this week."

That admission by the administration came as lawmakers prepared to reopen the conference committee later this afternoon to make final changes to the bill in order to ensure adequate Republican support to approve the changes to financial regulations in the Senate.

A spokesman for Senate Majority Leader Harry Reid (D-Nev.) also said Tuesday it would be difficult to hold a vote on the Wall Street reform legislation this week.

With Sen. Robert Byrd (D-W.Va.) scheduled to lie in repose on the Senate floor almost all day Thursday and with work left to do on the legislation, spokesman Jim Manley told reporters completing work would be "difficult, but it's still possible."

President Barack Obama has said repeatedly he wanted to sign the reforms into law before the Fourth of July recess.

House and Senate conferees reopened their meetings Tuesday after Republicans expressed opposition to a $19 billion fee on financial institutions included in the conference report last week.

The meeting convened after Sen. Scott Brown (R-Mass.) released a letter outlining his objection to the bank fee, saying he would oppose the current bill.

Sen. Susan Collins (R-Maine), who, like Brown, voted for cloture on the original measure, echoed Brown's concerns with the fees but stopped short of saying it would prevent her from voting against the legislation.

Democrats are scrambling to find the votes to pass the measure. They lost one vote with the passing of Byrd. Democrats broke cloture in the Senate in May by a slim 60-40 margin.

Even though Brown backed off the bill, Manley said Reid will still look to him for support.

"Sen. Brown is someone [Sen. Reid] can do business with, and we look forward to getting his vote on these issues on the future," he said. 

Originally posted at 3:05 p.m. and updated at 3:34 p.m.