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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 BrownWyden: Funding infrastructure with gas tax hike a 'big mistake' Sherrod Brown calls Rand Paul 'kind of a lunatic' for not wearing mask On The Money: How demand is outstripping supply and hampering recovery | Montana pulls back jobless benefits | Yellen says higher rates may be necessary 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 WarnerOvernight Defense: Former Pentagon chief to testify about Capitol riot Wednesday | Senate Intelligence chairman wants Biden to review US Space Command move Wyden: Funding infrastructure with gas tax hike a 'big mistake' Senate Intelligence chairman wants Biden to review US Space Command move 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 MerkleyJeff MerkleySenate panel deadlocks in vote on sweeping elections bill Senate descends into hours-long fight over elections bill Senate poised for all-day brawl over sweeping elections bill MORE (D-Ore.) and Carl LevinCarl Milton LevinThe Hill's Morning Report - Biden officials brace for worst despite vaccine data Michigan GOP unveils dozens of election overhaul bills after 2020 loss How President Biden can hit a home run MORE (D-Mich.) want to ban proprietary trading, which would fall heavily on Wall Street banks. Sens. John McCainJohn Sidney McCainCheney set to be face of anti-Trump GOP Ex-McSally aide pleads guilty to stealing over 0K in campaign funds DOJ: Arizona recount could violate civil rights laws MORE (R-Ariz.) and Maria CantwellMaria Elaine CantwellThis week: Congressional leaders to meet with Biden amid GOP reckoning Will Biden's NASA win the space race with China? Bill Nelson is a born-again supporter of commercial space at NASA 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 ReedJack ReedOvernight Defense: US fires 30 warning shots at Iranian boats | Kabul attack heightens fears of Afghan women's fates | Democratic Party leaders push Biden on rejoining Iran deal Overnight Defense: Former Navy secretary reportedly spent .4M on travel | Ex-Pentagon chief Miller to testify on Jan. 6 Capitol attack | Austin to deliver West Point commencement speech Overnight Defense: Gillibrand makes new push for military sexual assault reform | US troops begin leaving Afghanistan | Biden budget delay pushes back annual defense policy bill 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 Ruthven HaganBiden's gun control push poses danger for midterms The two women who could 'cancel' Trump 10 under-the-radar races to watch in November 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) MenendezDemocrats reintroduce legislation to ban 'ghost guns' Juan Williams: A breakthrough on immigration? Biden rebuffs Democrats, keeps refugee admissions at 15,000 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 DurbinDick DurbinSenate poised for all-day brawl over sweeping elections bill Biden-McConnell cold war unlikely to end at White House Amazon blocks 10B listings in crackdown on counterfeits 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 SandersBernie SandersWyden: Funding infrastructure with gas tax hike a 'big mistake' The Hill's Morning Report - Presented by Facebook - Biden, Congress drawn into pipeline cyberattack, violence in Israel The Memo: Outrage rises among liberals over Israel 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.