Wall Street reform conference begins with Dem-GOP bickering

Democrats and Republicans launched into sharp attacks Thursday only minutes into conference negotiations to finalize sweeping new Wall Street regulations.

Senate Banking Committee Chairman Chris Dodd (D-Conn.) said Republicans “can be as relevant as they choose.” Sen. Richard Shelby (R-Ala.), sitting inches away, said the talks were off to a “rocky start” and were on the road to “political theater.”

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Republican colleagues criticized 300 pages of additional changes that were added after the Senate passed legislation last month.

Democrats vow to finish negotiations on the bill, now totaling 1,974 pages, and send the final version to President Barack ObamaBarack Hussein ObamaKrystal Ball tears into 'Never Trump' Republicans Sanders campaign announces it contacted over 1 million Iowa voters Iowa Steak Fry to draw record crowds for Democrats MORE’s desk by the July 4 recess. The legislation aims to bolster consumer financial protections, regulate the $600 trillion market for financial derivatives and end taxpayer-funded bailouts of financial firms.

The 43-member conference makeup is stacked in the Democrats’ favor, and if the majority is able to resolve a few large differences, Republicans likely will be unable to prevent the legislation from being enacted this year. There are 20 Democrats and 11 Republicans representing the House with either a say on the whole bill or on a specific section. For the Senate, there are seven Democrats and five Republicans.

“This is a very strong bill. It is time we get it to the president’s desk,” Dodd said.

House Financial Services Committee Chairman Barney Frank (D-Mass.), who will also serve as chairman of the conference committee, pronounced himself an “impatient” person and hoped to move the process along quickly in a “very open process.” C-SPAN pledged to televise the public conference hearings, which will reconvene on Tuesday.

Dodd warned against a “lobbying blitz” and said that despite some improvement in the broader economy, the 2008 financial crisis still looms large. Reminders of the depths of the crisis, in fact, were only a few feet away.

Over their shoulders, televisions screens briefly displayed a Republican slide listing “too big to fail” institutions: Bank of America, JPMorgan Chase & Co., Citigroup, Goldman Sachs and Morgan Stanley. Congressional staff, sitting behind lawmakers, looked up at the screens, which hung in a room home to some of the most contentious hearings into how the government committed trillions of dollars to support the economy.

Rep. Paul Kanjorski (D-Pa.) inveighed against “financial whiz kids” and greedy Wall Street bankers who spawned a litany of ill-understood products. Sen. Tom HarkinThomas (Tom) Richard HarkinWisconsin lawmaker gets buzz-cut after vowing not to cut hair until sign language bill passed Democratic debates kick off Iowa summer sprint Key endorsements: A who's who in early states MORE (D-Iowa) said part of the solution was for lawmakers to reinstate a Great Depression-era law that drove a wedge between commercial and investment banks. “We ought to go right back,” Harkin said.

Such a large change, which was part of neither the House nor Senate bill, is unlikely, but lawmakers were already staking out ground on other controversial provisions.

The conference process will start with legislation that passed the Senate, but staff added a series of changes before the conference committee began. Among the changes is power for government audits of a new council of financial regulators, a mandate for financial agencies to set up offices of minority and female inclusion, preservation of the thrift charter and an exemption from credit concentration limits for Federal Home Loan Banks.

The base text of the conference also includes a new 188-page title: the “Mortgage Reform and Anti-Predatory Lending Act,” with new mortgage and underwriting standards. The title reflects provisions from the House bill, and some parts of the Senate bill.

Even before the new changes, lawmakers were preparing for tough battles on a few highly controversial provisions. At the top of the list is a provision sponsored by Senate Agriculture Committee Chairwoman Blanche Lincoln (D-Ark.) that would require banks to push out their derivatives trading desks.

Big banks and federal regulators oppose the provision, but it remains and Lincoln and Harkin both praised it on Thursday. House Agriculture Committee Chairman Collin Peterson (D-Minn.) said he was glad the issue would be debated in the conference.

Republicans reprised their attacks on the legislation that it avoids new regulations of Fannie Mae and Freddie Mac, the two government-sponsored enterprises bailed out by taxpayers. Frank dismissed their concerns, as he has during the past two years. “Twelve years of Republican rule. No legislation to regulate Fannie Mae and Freddie Mac,” Frank said of Republican control from 1995 through 2006. The Obama administration has pledged to regulate the two entities at a later date.

Community banks and credit unions were ramping up their campaign against a provision in the bill, added by the Senate, that would direct the Federal Reserve to clamp down on rates paid by merchants to debit card issuers. The U.S. Chamber of Commerce, meanwhile, was preparing a grassroots campaign to target lawmakers on the bill.