Amendments piling up for Wall St. reform

Over the next two weeks, the Senate will consider possibly hundreds of amendments to the Wall Street overhaul package.


Whether the changes strike hundreds of pages from the bill or only a word or two here and there, the proposed amendments could dramatically alter financial regulation for years and are being aggressively lobbied by a variety of interests.

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Consumer advocates and financial lobbyists have turned all their attention to the Senate floor, after bipartisan negotiations conducted behind closed doors broke down on many of the most critical provisions.

Below is a look at some of the major areas of debate:

Concerns about big banks

A wide array of senators wants to cut down on the size of big banks and rein in their trading practices through a series of measures with populist appeal.

Sens. Sherrod BrownSherrod Campbell BrownThe Hill's 12:30 Report Avalanche of Democratic senators say Franken should resign Overnight Regulation: Feds push to clarify regs on bump stocks | Interior wants Trump to shrink two more monuments | Navajo Nation sues over monument rollback | FCC won't delay net neutrality vote | Senate panel approves bill easing Dodd-Frank rules MORE (D-Ohio) and Ted Kaufman (D-Del.) are leading an effort to statutorily limit the size of banks. The financial industry, Republicans and even some Democrats such as Sen. Mark WarnerMark Robert WarnerSenate panel moves forward with bill to roll back Dodd-Frank Comey back in the spotlight after Flynn makes a deal Warner: Every week another shoe drops in Russia investigation MORE (Va.) say there is nothing inherent in the size of a bank that makes it a greater risk to the economy.

Sen. Byron Dorgan (D-N.D.) introduced a separate amendment Tuesday that would require the council of financial regulators to identify firms that are “too big to fail.” The council would require changes to those firms.

Meanwhile, Sens. Jeff MerkleyJeffrey (Jeff) Alan MerkleyAvalanche of Democratic senators say Franken should resign Senate nixes provision boosting conservative college after uproar Overnight Energy: Panel advances controversial Trump nominee | Ex-coal boss Blankenship to run for Senate | Dem commissioner joins energy regulator MORE (D-Ore.) and Carl LevinCarl LevinCongress: The sleeping watchdog Congress must not give companies tax reasons to move jobs overseas A lesson on abuse of power by Obama and his Senate allies MORE (D-Mich.) want to ban proprietary trading, which would fall heavily on Wall Street banks. Sens. John McCainJohn Sidney McCainGOP strategist donates to Alabama Democrat Meghan McCain knocks Bannon: 'Who the hell are you' to criticize Romney? Dems demand Tillerson end State hiring freeze, consult with Congress MORE (R-Ariz.) and Maria CantwellMaria Elaine CantwellAvalanche of Democratic senators say Franken should resign Week ahead: Trump expected to shrink two national monuments Live coverage: Senate Republicans pass tax bill MORE (D-Wash.) have talked of an amendment to impose provisions similar to the 1933 Glass-Steagall Act that set up a wall between commercial and investment banking.


Derivatives

The highest-profile debate in the bill has turned on whether Congress should require banks to “spin off” their derivatives desks.

The provision was a latecomer to the bill when Senate Agriculture Committee Chairwoman Blanche Lincoln (D-Ark.) first offered it in April. Ever since, banks have lobbied heavily against the measure.

The Federal Deposit Insurance Corporation raised concerns about the provision shifting derivatives trading into less regulated markets. Industry sources and consumer advocates say they expect to see changes in the measure, but no senator has offered a way forward on the thorny issue.

Meanwhile, energy groups and others continue to push for a broader exemption for “end users” of derivatives.


Consumer protections

The financial industry and lawmakers are clashing on the specifics of a new office to oversee consumer financial protection. Sen. Jack ReedJohn (Jack) Raymond ReedSenate panel moves forward with bill to roll back Dodd-Frank Army leader on waiver report: 'There's been no change in standards' 15 Dems urge FEC to adopt new rules for online political ads MORE (D-R.I.) will offer an amendment making the consumer office completely standalone, instead of housing it at the Federal Reserve.

A yearlong debate has raged over the creation of the new office, but a great deal of the attention on the Senate floor will turn to the details of the office, including its power to set and enforce rules.

The financial industry, White House and lawmakers are fighting over whether the federal government should have power to pre-empt regulations in states.

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The issue has been a long-running battle, with consumer advocates, the White House and many Democrats in favor of allowing state officials to go beyond federal regulations. The financial industry and some Democrats and Republicans say that without federal pre-emption, there will be a patchwork quilt of state regulations that could restrict credit for borrowers.

Meanwhile, Sen. Kay HaganKay HaganPolitics is purple in North Carolina Democrats can win North Carolina just like Jimmy Carter did in 1976 North Carolina will be a big battleground state in 2020 MORE (D-N.C.) is looking to restrict payday lenders and Sen. Sam Brownback (R-Kan.) is leading an effort to exempt auto dealers from the consumer regulator’s power.


Hedge funds, broker-dealers

After federal regulators charged Goldman Sachs with defrauding investors, senators looked more closely at new restrictions on firms when they give investment advice.

Sens. Robert MenendezRobert (Bob) MenendezSenate ethics panel resumes Menendez probe after judge declares mistrial Judge declares mistrial in Menendez bribery case Menendez jury deadlocked, ordered to keep trying MORE (D-N.J.) and Daniel Akaka (D-Hawaii) want to require that broker-dealers have a fiduciary duty to act in the best interest of their clients when they give advice.

Reed plans to introduce an amendment requiring hedge funds, private equity companies and other investment funds with at least $30 million to register as investment advisers with the Securities and Exchange Commission. The amendment is strongly backed by consumer advocates and labor unions.


Single-issue

Senate Majority Whip Dick DurbinRichard (Dick) Joseph DurbinDemocrats turn on Al Franken Minnesota's largest newspaper calls on Franken to resign Democratic senator predicts Franken will resign Thursday MORE (D-Ill.) is planning to introduce three amendments clamping down on interchange fees between credit card issuers and retailers, merchants and others. Many merchant groups support the changes, while banks and credit unions are overwhelmingly opposed.

Sen. Bernie SandersBernard (Bernie) SandersSchumer: Franken should resign Franken resignation could upend Minnesota races Avalanche of Democratic senators say Franken should resign MORE (I-Vt.) will offer a closely watched amendment to allow for more government audits of the Federal Reserve. The legislation is similar to a measure backed by Rep. Ron Paul (R-Texas) and that passed the House in December.

The Federal Reserve strongly opposes the legislation, arguing that additional audits would compromise the private market’s confidence in the bank’s ability to set monetary policy free of political meddling.