Senate quickly moves Dodd-Frank fix

The Senate signed off on a specific tweak to the Dodd-Frank financial reform law that will ease pressure on massive insurance companies.

The chamber quickly approved a bill Tuesday evening that would make clear that insurance companies deemed critical to the financial system will not have to adhere to capital standards set for banks.

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The Democrat-led Senate has long been loathe to consider any changes to the landmark financial reform law, out of concern that cracking the law open for minor changes could lead to a broader debate about more substantive changes.

But the bill passed by unanimous consent Tuesday enjoyed broad support from members across the ideological spectrum, and tweaks a chunk of the reform law known as the “Collins Amendment.”

That provision requires the Federal Reserve to set minimum capital standards for so-called “systemically important” nonbank financial institutions, like insurance companies. The Fed interpreted that language as requiring it to apply bank capital standards to nonbanks. 

A number of lawmakers, including Collins herself, insisted that wasn’t the case, but the Fed maintained its hands were tied based on the language in the law. The bill the Senate passed Tuesday would clarify that point, and now heads to House. If approved and sent to the president, it could be the first change to the 2010 ushered through Congress.