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.

ADVERTISEMENT

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 BrownBlood cancer patients deserve equal access to the cure Trump admin abruptly delays funding for human trafficking victims: report Overnight Energy: Lawmakers show irritation over withheld Interior documents | Republican offers bipartisan carbon tax bill | Scientists booted from EPA panel form new group 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 WarnerSenators take fundraising efforts to Nats playoff games Senate Intelligence report triggers new calls for action on election security Senate Intel report urges action to prevent Russian meddling in 2020 election 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 MerkleyDemocrats urge Rick Perry not to roll back lightbulb efficiency rules Democratic senator on Trump's 'treason' comments about whistleblower: 'I worry about threats on his or her life' Overnight Energy: Lawmakers show irritation over withheld Interior documents | Republican offers bipartisan carbon tax bill | Scientists booted from EPA panel form new group MORE (D-Ore.) and Carl LevinCarl Milton LevinRemembering leaders who put country above party Strange bedfellows oppose the filibuster Listen, learn and lead: Congressional newcomers should leave the extremist tactics at home MORE (D-Mich.) want to ban proprietary trading, which would fall heavily on Wall Street banks. Sens. John McCainJohn Sidney McCainRemembering leaders who put country above party Graham-Trump rollercoaster hits dizzying speed McSally says Senate taking 'serious look' at Trump call unlike 'partisan' House MORE (R-Ariz.) and Maria CantwellMaria Elaine CantwellDemocrats urge Rick Perry not to roll back lightbulb efficiency rules Hillicon Valley: Trump official declines to testify on trade protections for tech | Senators call for better info-sharing on supply chain threats | Apple pulls app after Chinese pressure On The Money: Trump to meet China's vice premier during trade talks | Appeals court says Deutsche Bank doesn't have Trump's tax returns | House Appropriations Chair Nita Lowey to retire 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) Francis ReedDemocrats urge Rick Perry not to roll back lightbulb efficiency rules Congress set for showdown with Trump over Kurds Top Democrats warn against withdrawing from treaty that allows observation flights over Russia 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.

ADVERTISEMENT

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 HaganWarning signs flash for Tillis in North Carolina Tillis trails Democratic challenger by 7 points in North Carolina poll North Carolina businessman will challenge Tillis in GOP primary 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) MenendezSenators ask Treasury to probe Brazilian meatpacker with major US footprint Top Foreign Relations Democrat calls on Pompeo to recuse himself from Ukraine matters Democrats question Pence, Perry on travel to Ukraine 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 DurbinSenators take fundraising efforts to Nats playoff games Overnight Health Care: Watchdog finds DEA allowed more opioids even as overdose deaths rose | Judge temporarily blocks Georgia abortion law | Three states report more vaping deaths | Dem proposes new fix for surprise medical bills During impeachment storm, senators cross aisle to lessen mass incarceration 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 SandersSanders on difference with Warren: she's a capitalist 'I'm not' Sunday Show Preview: Trump's allies and administration defend decision on Syria Klobuchar takes shots at health and education plans supported by Sanders and Warren 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.