Financial reform takes center stage in Senate

Senate Democrats embark Monday on a seven-week effort to hammer out differences on a financial overhaul bill that they aim to pass before Memorial Day.

President Barack ObamaBarack Hussein ObamaOvernight Energy: Dems ask Pruitt to justify first-class travel | Obama EPA chief says reg rollback won't stand | Ex-adviser expects Trump to eventually rejoin Paris accord Overnight Regulation: Trump to take steps to ban bump stocks | Trump eases rules on insurance sold outside of ObamaCare | FCC to officially rescind net neutrality Thursday | Obama EPA chief: Reg rollback won't stand Ex-US ambassador: Mueller is the one who is tough on Russia MORE and congressional Democrats have redoubled their efforts to overhaul the financial system following the passage of healthcare legislation this year. Senate Banking Committee Chairman Chris Dodd (D-Conn.) is shepherding the bill through the upper chamber, but few lawmakers off his panel have focused closely on the legislation.

Democrats need to win over at least one Republican to break a possible filibuster. Senate Republicans opposed Dodd's bill during committee markup, but the two parties are still negotiating the details of the bill in an effort to have bipartisan support, aides say.

Meanwhile, Senate Agriculture Committee Chairwoman Blanche Lincoln (D-Ark.) will unveil legislation to regulate the derivatives market that will need to be meshed with Dodd's bill. The Agriculture panel oversees the Commodity Futures Trading Commission (CFTC), which would gain new oversight over the market. 

Senior administration officials told reporters on Wednesday they would fight any efforts to weaken the bill, mentioning possible exemptions to consumer regulations for auto dealers and exemptions from new rules in the multitrillion-dollar derivatives market.

Lobbyists from across the financial and business world are looking for major and minor changes to the legislation. Some interests are pursuing individual floor amendments, while others are looking for changes before the bill hits the Senate floor.

The National Automobile Dealers Association (NADA) is supporting an amendment from Sen. Sam Brownback (R-Kan.) to exempt auto dealers from a new consumer protection office.

Sen. Sherrod BrownSherrod Campbell BrownLawmaker interest in NAFTA intensifies amid Trump moves Dem senator shares photo praising LeBron James after Laura Ingraham attacks Trump gets recommendation for steep curbs on imported steel, risking trade war MORE (D-Ohio) had an amendment before the markup that would limit banks from having large ownership stakes in clearinghouses that act as middleman between buyers and sellers of derivatives.

Big banks are concerned about new regulations that could limit proprietary trading, under the so-called, “Volcker rule.” They had not expected that the rule would be added to Dodd's bill. The rule was outlined by the White House after the House passed its financial overhaul in December, and is supported by Paul Volcker, adviser to the White House and former Federal Reserve chairman.

Real estate and financial interests argue a new requirement for lenders to retain 5 percent of risk in asset-backed securities could hurt real estate and credit markets as they struggle to recover.