Democrats threaten to oppose Sen. Shelby’s financial services bill

Democrats on the Senate Banking Committee are threatening to oppose a financial services overhaul from Chairman Richard Shelby (R-Ala.) that they say some members of the panel do not have access to.

Sen. Sherrod BrownSherrod Campbell BrownOn the Money — Student borrowers stare down rising prices Biden selects Sarah Bloom Raskin, two others for Fed board Sinema, Manchin curb Biden's agenda MORE (D-Ohio), the top Democrat on the panel, and the nine other Democrats on the panel signed a letter to Shelby expressing their "concern" and "great disappointment" with how he is handling the legislation.

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"We write to express our concern and great disappointment with your plan to consider broad legislation in the Senate Banking Committee without giving all committee Democrats time to analyze and review your proposal," the lawmakers wrote. "This does not speak well to the past history of bipartisanship on the Senate Banking Committee."

Shelby had been expected to hold a markup of the legislation next week, which Democrats objected to.

"A markup in one week on a broader proposal will not lead to a positive outcome," they wrote. "Given that you have not shared text of the legislation with all members of the Banking Committee, we are writing to inform you that we will be united in opposition if you go forward as planned."
After the letter was released, Shelby announced that the markup of the legislation would be held on May 21, one week later than initially planned.
 
A Banking Committee spokeswoman said that Shelby intends to distribute the bill's text on Monday.

The Committee spokesperson also said that Brown has had a copy of the bill's text for one week and that Republican members also have copies of it.
 
According to sources familiar with the draft proposal, Shelby's bill would create a congressional panel to look into reforming the Federal Reserve. It would also make the New York Fed president position a presidential appointee. Some of those Fed transparency provisions could see bipartisan support.

But liberals are likely to oppose other provisions that were included in the legislative outline of the bill, such as tying a mechanical rule to set monetary policy.

Other provisions that some Democrats would likely oppose include changing how regulators designate an institution as "systemically important financial institutions" (SIFI). The current draft proposal increases the threshold amount of consolidated assets from $50 billion to $500 billion. SIFI designation subjects financial institutions to more regulatory oversight.

Shelby will need to attract moderate Democratic support if he wants to clear the 60-vote procedural threshold to get his bill a vote in the upper chamber.

Democrats on the Banking Committee met on Thursday to discuss their frustrations with the process.

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— This story was last updated at 5:28 p.m.