Banking/Financial Institutions

Campaign fundraising records show that John A. Paulson gave $30,400 to the Democratic Senatorial Campaign Committee in June.

Bank of America on Friday reported first-quarter 2010 net income of $3.2 billion. Last year, the bank reported a net loss of $194 million for its fourth quarter. 

Strong capital market activity was partly credited for the turnaround, especially on the global market. 

"With each day that passes, the 2010 story appears to be one of continuing credit recovery," said CEO and president Brian Moynihan. 

Last year, Bank of America received $20 billion in federal bailout funds and $118 billion in loan guarantees against toxic assets after it bought Merrill Lynch.

Senate Agriculture Chairwoman Blanche Lincoln, (D-Ark.), unveiled a tough draft bill today to regulate the over-the-counter derivatives market 

The measure includes mandatory clearing and trading requirements, real-time reporting of derivatives trades and closes loopholes providing "100 percent transparency" to the unregulated $600 trillion market. 

The measure will be marked up Wednesday and will be attached to a financial regulatory reform bill authored by Senate Banking Chairman Chris Dodd (D-Conn.). 

"The days of backroom Wall Street deals are over," Lincoln said. "This is the strongest Wall Street reform bill to date and represents an historic opportunity for real reform. America’s consumers and businesses will finally see a financial market that operates in an open and transparent manner.”

The unified Republican front puts pressure on Democratic leaders to make revisions to legislation drafted by Sen. Chris Dodd (D-Conn.).

Senate Republicans are united against proposed financial regulatory reform legislation because it allows for taxpayer-financed bailouts and would stifle small businesses and community banks. 

All 41 Republicans signed a letter to Senate Majority Leader Harry Reid (D-Nev.), calling for a bipartisan bill that "should address the damaging financial practices of big Wall Street firms and government-sponsored entities that led to unprecedented taxpayer bailouts and caused our government to take on enormous amounts of debt."

"We are united in our opposition to the partisan legislation reported by the Senate Banking Committee," the letter said. 

Obama warned anxious congressional Democrats on Friday that he would veto any bill that does not "bring the derivatives market under control."

Sen. Bob Corker is one of three Senate Republicans seen as possible votes for a Wall Street reform bill.

Sen. Carl Levin (D-Mich.) on Thursday accused the Office of Thrift Supervision for doing very little to stop the downfall of Seattle-based Washington Mutual Bank in September of 2008. 

"Washington Mutual's collapse is a tale of greed and mismanagement, but it is also a case history for ineffective bank regulators who saw years of unsafe and unsound banking practices, but failed to stop them," Levin said. 

The senator chairs the Senate Permanent Subcommittee on Investigations and on Friday will examine WaMu's collapse by having OTS and FDIC officials testify before his panel. 

Taxpayer-financed bailouts would end under pending financial regulatory reform legislation being worked out in the Senate, according to a leading federal regulator.   

The measure is under fire from Republicans including Senate Minority Leader Mitch McConnell (R-Ky.) have argued that the bill perpetuates bailouts and he is trying to mount support against it. Republicans and Democrats are trying to get back to the negotiating table to work out major details. 

The bill "makes them impossible and it should," said Shelia Bair, chief of the Federal Deposit Insurance Corp., in an interview with The American Banker. "We worked really hard to squeeze bailout language out of this bill. The construct is you can't bailout out an individual institution, you just can't do it."

If the bill were in place in 2008 it wouldn't have been possible to help AIG or Bear Stearns because the bill provides only systemwide liquidity support and could not be targeted at an individual or firm. The bill would goes a long way to end "too big to fail," she said. 

"You can't do capital investments at all, period," she said. 

After days of sparring over financial regulation reform, Senate Democrats and Republicans seemed to make some headway and agree to reignite talks. 

Since returning from recess Republicans have insisted that the legislation includes bailout provisions while Senate Banking Chairman Chris Dodd (D-Conn.) has steadfastly disagreed with the assessment and has chastised opponents for trying to kill the bill and spreading misinformation. 

"Either the Minority Leader doesn't know what's in the bill or he's chosen to distort it," Dodd said in response to comments made earlier Thursday by Senate Minority Leader Mitch McConnell (R-Ky.).