White House criticizes terrorism bill, but stops short of veto threat

The Obama administration on Wednesday said it opposes a provision in a terrorism insurance bill that would change the 2010 Wall Street reform law, but stopped short of threatening a veto.

Sen. Charles Schumer (D-N.Y.) and the White House say they oppose the provision despite broad bipartisan support for what House Financial Services Committee ranking member Maxine Waters (D-Calif.) once described as a “technical fix” to Dodd-Frank.

{mosads}The provision would change the law so that non-financial institutions — so-called end users, in the lingo of the financial sector — do not have to follow some of the same regulations as big banks.

The administration’s policy statement released on Wednesday said it supports reauthorizing the Terrorism Risk Insurance Act (TRIA), but has “serious concerns” regarding the “end users” provision.

“The administration strongly opposes the inclusion of modifications to the Dodd-Frank Wall Street Reform and Consumer Protection Act, specifically the end user provision, in this TRIA-related bill that has broad bipartisan support,” according to the administration’s policy statement.

TRIA is a program that allows for the government to act as a federal backstop for businesses following massive terror attacks exceeding $100 million. The TRIA reauthorization being debated in the House would increase that threshold to $200 million.

Republicans and 181 House Democrats have already voted for a House version of the “end users” bill, saying it would clarify Dodd-Frank, lessen regulatory burden and help boost economic growth.

The House is likely to pass a six-year TRIA reauthorization bill Wednesday afternoon. But it’s unclear if it will die in the Senate, where Schumer and Senate Democrats oppose the “end users” provision.

House Financial Services Committee Chairman Jeb Hensarling (R-Texas) negotiated the TRIA deal with Schumer.

Hensarling criticized Waters on the House Floor for arguing that “end users” shouldn’t be included in the TRIA bill.

“She was for it before she was against it,” Hensarling said.

Waters has echoed the administration in arguing that while she supports the change to Dodd-Frank, it shouldn’t be included in the terrorism bill.

“Broadening Dodd-Frank’s statutory exemptions is a complicated issue with serious implications for the health and stability of the Nation’s financial markets,” the administration said. “This bill hould not be used as a vehicle to add entirely unrelated financial regulatory provisions.”


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