Banking/Financial Institutions

Sen. Ron Wyden (D-Ore.) looks to add to the financial reform bill a measure that forces finance firms to disclose any stake it has in seeing a product lose value.

The amendment comes on the heels of findings from Sen. Carl Levin (D-Mich.) that discovered a conflict of interest existed at Goldman Sachs because it bet against the very securities it sold to clients. 

Senate leadership agreed Wednesday night to move to debate on the financial regulatory reform bill without a fourth vote. 

After three votes to move to debate, Senate Republicans opted to let the measure come to the floor for debate after Senate Banking Committee leaders agreed to a tightening of 'too big to fail' provisions, which was enough to break the stalemate. 

Senate Majority Leader Harry Reid (D-Nev.) and Senate Minority Leader Mitch McConnell (R-Ky.) came to the floor tonight to announce the agreement to begin debate. 

Senate Banking ranking member Richard Shelby (R-Ala.) said he still has concerns about the role of a consumer protection agency and the derivatives title but he was optimistic changes could be made to the bill to gain bipartisan support. 

"I hope we will resolve these issues on the floor of the Senate," Shelby said. 

Senate Banking Chairman Chris Dodd (D-Conn.) said he hopes to "resolve matters and to have a good outcome for this bill."

Dodd said discussions so far have been "worthwhile and productive" and he expects to set up shop over the weekend and examine possible amendments. 

"Now let's get to work," Reid said. 

Senate Republicans tonight said they are nearly united and ready to move ahead on a financial regulatory reform bill. 

Emerging from a conference meeting, several Senators including Bob Corker (R-Tenn.), Olympia Snowe (R-Maine) and Lamar Alexander (R-Tenn.) all said it was time to begin debate on the bill. 

"There is widespread sentiment that we've made substantial progress," Alexander told reporters. "We agree it's time to move the bill to the floor."

Those three votes would be enough to get to 60 if Senate Democrats decide to put the motion to reconsider up for another tally. The Senate also could just use a unanimous consent agreement to bring up the bill. 

"We'll have plenty of opportunity to debate and discuss it," Alexander said. 

Despite the willingness to move forward, several Republicans -- Sens. Tom Coburn (R-Okla.) and Saxby Chambliss (R-Ga.) -- said they still oppose the bill and won't vote to start debate.

The Senate came to an agreement on 'too big to fail' provisions but couldn't compromise on the scope of a consumer protection agency or derivatives language. 

Senate Democrats are pushing a bonus tax on bailed-out firms as part of financial overhaul legislation.

The legislation is supported by Democratic Sens. Jim Webb (Va.), Barbara Boxer (Calif.), Dick Durbin (Ill.), Patty Murray (Wash.), and Blanche Lincoln (Ark.). Sen. Bernie Sanders (I-Vt.) also supports the measure, which was first introduced by Webb and Boxer.

The legislation would put a one-time tax on bonuses paid in 2010 to executives at financial institutions that received $5 billion or more from the $700 billion financial bailout package. The 50 percent tax would fall on bonuses in excess of $400,000.

"It is a targeted, sensible approach to ensure that the taxpayers who made possible the success of the biggest financial institutions benefit from that success--not just the executives of those institutions," Webb said in a statement.

Republicans announced resolution of bailout loopholes on the financial regulatory reform bill Wednesday afternoon as talks break down. 

"Now that bipartisan negotiations have ended, it is my hope that the majority's avowed interest in improving this legislation on the Senate floor is genuine and the partisan gamesmanship is over," said Senate Minority Leader Mitch McConnell (R-Ky.) in a statement. 

A meeting on moving forward on the bill is set for 4:30 p.m., according to a senior Republican aide. 

Senate Democratic leaders were pushing for an all-nighter and recurring votes to move the bill earlier today. 

Senate Banking ranking member Richard Shelby (R-Ala.) had said he had received assurances from Sen. Chris Dodd, (D-Conn.), that Democrats would accept changes to the 'too big to fail' portion of the bill. 

"Chairman Dodd has assured me that he will address a number of concerns I have expressed with respect to ending bailouts," Shelby said in a release. "We have been unable, however, to make any meaningful progress on other important components of the legislation. It is now my believe that further negotiations will not produce additional results."

Senate Majority Leader Harry Reid (D-Nev.) said he would allow an open amendment process on the floor to insure the bill in improved and tightened. 

Still, McConnell said he is still "deeply troubled by a number of provisions in this bill and will work aggressively in the days ahead to ensure the majority does not use our mutual interest in regulating Wall Street to extend the federal government's unwanted hand into Main Street."

Updated 4:18 p.m.

Lone Democratic dissenter Sen. Ben Nelson (D-Neb.) said he doesn't hold the decisive vote to bring financial reform to the floor, although he's waiting for a bipartisan agreement before budging. 

Nelson, who has voted 'no' on each of the three cloture motions that would allow the Senate to begin debate, suggested counting the votes. 

There are 59 Democrats -- West Virginia Democrat Robert Byrd didn't vote today -- so at least one Republican needs to defect to reach the 60 needed to move to the bill.  

The count today was 56-42 with Nelson and Senate Majority Leader Harry Reid (D-Nev.) voting against the measure just so he can bring it up again. 

But there's no pressure at this point on Nelson to change his vote, he told reporters Wednesday. 

"It's my decision and I'm independent on voting and it has nothing to do with the way anyone else votes," he said. 

Senate Republicans aren't likely to change their votes until either a bipartisan agreement is reached or negotiations reach a point where the only option is to bring the bill to the floor for debate. 

Leading Republicans today suggested the latter will happen and they'll decide it's time for to begin debate on the measure. 

Short-term interest rates remained unchanged by the Federal Reserve on Wednesday and would probably hold steady for an "extended period."

Economic conditions such as subdued and stable inflation rates are calling for "exceptionally low levels" of the federal funds rate for an extended period, according to the Federal Open Market Committee, the Fed's policy-making arm. Rates have held low since December of 2008 during the financial sector crisis. 

While economic and job activity has continued to strengthen, there are overall constraints from high unemployment, modest income growth, lower housing wealth, tight credit and a reluctance to add to payrolls, leading to the Fed's decision to hold steady on rates. 

"The committee will continue to monitor the economic outlook and financial developments and will employ its policy tools as necessary to promote economic recovery and price stability," the committee said in a statement. 

The committee anticipates "moderate economic growth for a time." 

The White House joined Congressional Democrats in expressing impatience in moving a proposed financial regulation reform bill. 

As President Barack Obama made a swing through the Midwest, his aides continued the dialogue pressing for an overhaul of rules that govern the financial system. 

"There has been a lot of talk about his issue for a long time and people on both sides are saying they want to get something done," said White House spokesman Bill Burton on a flight Wednesday from Des Moines to Quincy, Ill. 

"The president has been impatient on this issue for a very long time. We need action and for the Senate to move this forward," Burton said, according to the pool report. 

"The president is committed to making sure we've made progress and get Wall Street reform done," he said. 

An investigation by Sen. Carl Levin (D-Mich.) into the investment activities at Goldman Sachs concluded there was a conflict of interest at the bank. 

"The bottom line is, what we discovered in this investigation... is that there is a conflict of interest too often between what's in Goldman's interest, what's good for their bottom line, and what is in its clients' interests," Levin said. "These are deeply troubling findings."

Top Senate Banking Republicans conceded Wednesday that the financial regulatory reform bill will probably head to the floor without a bipartisan agreement even though they aren't ready to move the measure along. 

Senate Banking ranking member Richard Shelby (R-Ala.) and Sen. Bob Corker (R-Tenn.) told reporters that all roads lead to floor debate but they want to spend the rest of this afternoon ironing out the finer points of 'too big to fail', derivatives provisions and how a consumer protection agency would work. 

"There's no alternative," Corker said. "We're just not there yet."

Meanwhile, the Senate's Democratic leadership threatened an all-nighter with possible recurring votes and unanimous consent requests to end the stalemate on the bill. 

Senate Majority Whip Dick Durbin (D-Ill.) said "all options" were on the table to keep the floor open all night but voting decisions are up to Senate Majority Leader Harry Reid (D-Nev.). 

The third cloture vote in as many days failed 56-42, with Sen. Ben Nelson (D-Neb.) voting against the measure.