Frank, the chairman of the House Financial Services Committee, is trying this week to finish marking up several bills he hopes will be considered as one on the House floor.
Financial legislation is competing directly with a sweeping effort to overhaul the nation’s healthcare system, the annual spending bills Congress must pass and now, potential legislation to bolster the economy and reduce the nation’s 10.2 percent unemployment rate.
Frank has requested at least three days of floor time.
Frank’s committee is working through the final pieces of the overhaul package — regulating systemic risk and winding down failing financial firms, as well as creating a new federal insurance office.
The debate has been among the most contentious of the committee’s work this year.
Big banks are wary of an amendment being drafted by Rep. Paul Kanjorski (D-Pa.) that would give the government greater power to break up large financial firms. The amendment has yet to be circulated.
Small banks and credit unions are pushing an exemption from having to pay fees into a new fund that federal officials would use to cover the costs associated with future government takeovers.
Treasury Secretary Timothy Geithner has said so-called “resolution authority” is one of the central elements of the financial overhaul. The aim is to negate the need for government officials to have to turn to Congress in the middle of a crisis in search of bailout funds.
Frank had originally supported levying a fee only on financial firms with at least $10 billion in assets. Among those firms, there are roughly 120 banks and three credit unions that lend directly to consumers.
Rep. Brad Sherman (D-Calif.) has an amendment that would raise that threshold to $75 billion and adjust it each year to inflation. The Independent Community Bankers of America (ICBA), Credit Union National Association (CUNA) and National Association of Federal Credit Unions (NAFCU) have all been pushing to increase the threshold.
“NAFCU strongly supports Rep. Sherman’s amendment,” said Dan Berger, executive vice president at the association.
A coalition of 30 military organizations that represents 5.5 million active, Guard, Reserve, retired and former members of the uniform services and their families has voiced its opposition to the $10 billion threshold.
“This assessment would essentially be a tax on credit union patrons — to include military and Defense Department members and their families,” the organizations wrote to House lawmakers on Tuesday. The Navy Federal Credit Union and Pentagon Federal Credit Union both have more than $10 billion in assets.
The military organizations said one of the credit unions would face fees of roughly $67 million in one year if the resolution authority fund had to raise $100 billion.
Federal regulators would be able to levy fees on a much smaller group of financial companies if the threshold is drawn at $75 billion. According to market research firm SNL Financial, there are 21 banks and thrifts with assets in excess of $75 billion. Five large property and casualty insurance associations are also seeking an industry exemption from the fee.
Lobbyists for larger financial institutions expressed concern with lawmakers drawing a numeric line in the industry and are urging lawmakers to focus on a broader gauge of risk.
Frank said on Tuesday that lawmakers are also weighing questions of risk from various financial firms.
“We will be offering amendments that weight that according to risk. A mutual fund should not be assessed the same rate as a hedge fund,” Frank said.