Senate agriculture panel clears Lincoln's derivatives bill

The legislation crafted by Sen. Blanche Lincoln (D-Ark.), the panel's chairwoman, would require nearly all derivatives to be subjected to a clearinghouse. 

Sen. Chuck GrassleyCharles (Chuck) Ernest GrassleyGrassley: 'Good chance' Senate panel will consider bills to protect Mueller Overnight Finance: CBO to release limited analysis of ObamaCare repeal bill | DOJ investigates Equifax stock sales | House weighs tougher rules for banks dealing with North Korea GOP state lawmakers meet to plan possible constitutional convention MORE (Iowa) was the only Republican to support the bill. Other Republicans opposed the bill, in part, because they felt requiring all derivatives trades to go through a clearinghouse would prove too costly. 

Sen. Saxby ChamblissSaxby ChamblissFormer GOP senator: Let Dems engage on healthcare bill OPINION: Left-wing politics will be the demise of the Democratic Party GOP hopefuls crowd Georgia special race MORE (R-Ga.), the committee's ranking member, offered an amendment to limit the number of trades that would be subjected to a clearinghouse. His measure failed, 9 to 12. 

ADVERTISEMENT
A clearinghouse is used to ensure the soundness of the investment that is being traded. For example, the New York Stock Exchange is a clearinghouse for equity trades.

The bill now heads to the Senate floor for final consideration. It is expected to be rolled into a Wall Street reform bill written by Banking Committee Chairman Chris Dodd (D-Conn.) that has dominated the Senate's politics this week.

Under Lincoln's legislation, the Treasury Department will determine what derivatives trades must go through a clearinghouse. It also would force banks to divest in derivatives trades if they want to be eligible for federal assistance. The bill also requires that foreign trades go through the clearinghouse.