Major U.S. financial regulation reform proposals

November 24, 2009

    WASHINGTON, Nov 23 (Reuters) – Congress next week will resume work on tightening bank and capital market regulation, with the House Financial Services Committee expected to vote on Wednesday on systemic risk legislation.
   House floor consideration of that bill and others could follow in the second week of December. The Senate is only beginning to debate a bill offered by Senate Banking Committee Chairman Christopher Dodd and related measures.
   Below is a summary of proposals. Companies whose businesses could be at risk are listed under “political risk exposure.”
  
   SYSTEMIC RISK/RESOLUTION/BANK SUPERVISION:
   * House Financial Services Committee to vote, possibly as soon as Dec. 2, on bill addressing systemic risk in economy, what to do about “too big to fail” financial firms.
   (FACTBOX on House bill, double-click on [ID:nN19201171]
   (Full text of House bill, double-click on http://www.house.gov/apps/list/speech/financialsvcs_dem/committee_print_titlei102904.pdf)
   * Senate Banking Committee Chairman Christopher Dodd has proposed comprehensive financial regulation bill covering systemic risk and other topics listed below.
   (FACTBOX on Senate bill, double-click on [ID:nN10220875]
   (Full text of Senate bill, double-click on http://banking.senate.gov/public/_files/AYO09D44_xml.pdf)
  
   CREDIT RATING AGENCIES:
   * Bill approved by House Financial Services Committee on Oct. 28 sets up SEC oversight office, exposes agencies to more investor lawsuits, reduces references in U.S. law to ratings.
   (House bill, double-click on http://www.house.gov/apps/list/speech/financialsvcs_dem/markup_102109.shtml)
   * No action yet on bill from Democratic Senator Jack Reed.
   (Reed bill, double-click on http://www.thomas.gov/cgi-bin/bdquery/D?d111:8:./temp/~bdlq89::|/bss/|)
   * Obama administration bill similar to House bill, but excludes lawsuit exposure provision.
   (Administration bill, double-click on http://www.financialstability.gov/docs/regulatoryreform/titleIX_subtC.pdf)
   Political risk exposure: Moody’s Corp <MCO.N>, Standard & Poor’s <MHP.N>, Fitch Ratings <LBCP.PA>.
  
  
    OTC DERIVATIVES:
   * House Financial Services Committee on Oct. 16 approved bill to regulate OTC derivatives.
   (Committee bill, double-click on http://www.house.gov/apps/list/speech/financialsvcs_dem/markup_100809.shtml)
   * House Agriculture Committee on Oct. 21 approved similar OTC derivatives bill with fewer exemptions.
   (Committee bill, double-click on http://agriculture.house.gov/inside/legislation.html)
   * Both House bills, to be reconciled, exempt more derivatives from regulation than Obama administration bill.
   (Administration bill, double-click on http://www.financialstability.gov/docs/regulatoryreform/titleVII.pdf)
   * No action yet on OTC derivatives bill from Senator Reed.
   (Reed bill, double-click on http://www.thomas.gov/cgi-bin/bdquery/D?d111:19:./temp/~bdpPPm::|/bss/|)
   * New Senate Agriculture Committee Chairman Blanche Lincoln has said she will introduce an OTC derivatives bill.
   Political risk exposure: JPMorgan Chase <JPM.N>, Bank of America <BAC.N>, Citigroup <C.N>, Goldman Sachs <GS.N>, CME Group Inc <CME.O>, IntercontinentalExchange <ICE.N>.
  
   EXECUTIVE PAY:
   * House approved bill on July 31 to give shareholders annual, nonbinding votes on executive pay, ban pay at major financial institutions that encourages excessive risk-taking.
   (House bill, double-click on http://www.house.gov/apps/list/press/financialsvcs_dem/hr3269.pdf)
   * Obama administration bill would give shareholders more “say on pay,” like House measure, but not empower regulators to ban risk-inducing pay structures.
   (Administration bill, double-click on http://www.treas.gov/press/releases/docs/tg_218IX.pdf)
   * No action taken in Senate.
  
   CONSUMER PROTECTION:
   * House Financial Services Committee on Oct. 22 approved bill to create Consumer Financial Protection Agency (CFPA) to oversee mortgages, credit cards, other financial products.
   * House bill pares back administration proposal by exempting some businesses.
   (House bill, double-click on http://www.house.gov/apps/list/speech/financialsvcs_dem/markup_100809.shtml)
   (Administration bill, double-click on: http://www.financialstability.gov/docs/CFPA-Act.pdf)
    STUDENT LOANS:
   * Full House on Sept. 17 approved bill, supported by Obama administration, to revamp student loan industry.
   (House bill, double-click on: http://edlabor.house.gov/documents/111/pdf/legislation/StudentAidandFiscalResponsibilityAct.pdf)
   Political risk exposure: Sallie Mae <SLM.N>, Student Loan Corp <STU.N>, JPMorgan, Bank of America, ITT Educational Services <ESI.N>, Corinthian Colleges <COCO.O>.
  
   SECURITIZATION:
   * Administration calls for issuers of asset-backed securities to keep 5 percent of performance risk in loans.
   * House Financial Services Committee, Senate Banking Committee Bills propose 10 percent risk retention.
   Political risk exposure: Citigroup, Wells Fargo <WFC.N>, Bank of America, JPMorgan Chase.
   (Administration bill, double-click on http://www.financialstability.gov/docs/regulatoryreform/07222009/titleIX.pdf)
  
   INVESTOR PROTECTION:
   * House Financial Services Committee on Nov. 4 approved bill ordering common SEC standards for brokers and investment advisers, curb mandatory investor-broker arbitration, set up fund to pay corporate whistle-blowers.
   (Committee bill, double-click on http://www.house.gov/apps/list/speech/financialsvcs_dem/discussion_draft_of_the_investor_protection_act_of_2009.pdf)
   * Administration has similar, less far-reaching proposals.
   (Administration bill, double-click on http://www.treas.gov/press/releases/docs/tg205071009.pdf)
  
   HEDGE FUNDS, PRIVATE EQUITY, OFFSHORE:
   * House Financial Services Committee on Oct. 27 approved bill requiring hedge funds, private equity firms, offshore funds to register with SEC. Venture capital firms exempted.
   (Committee bill, double click on http://financialservices.house.gov/Key_Issues/Financial_Regulatory_Reform/FinancialRegulatoryReform/Discussion_Drafts/Discussion_Draft_of_the_private_fund_investment_advisors_registration_act_ 825253680
   * Related bill filed by Senator Reed. No action taken yet.
   (Reed bill, double-click on http://www.thomas.gov/cgi-bin/bdquery/D?d111:11:./temp/~bdAEZy::|/bss/|)
   Political risk exposure: Bridgewater Associates, D.E. Shaw Group, Farallon Capital Management, Citadel Investment Group, Fortress Investment Group <FIG.N> and many others.
  
   INSURERS:
   * House Financial Services Committee expected next week to vote on bill to set up Federal Insurance Office to monitor industry, gather data, but not regulate.
   Political risk exposure: Allstate Corp <ALL.N>, Travelers Cos Inc <TRV.N>, Hartford Financial <HIG.N>, MetLife Inc <MET.N>, Prudential Financial Inc <PRU.N>.
   (House bill, double-click on http://financialservices.house.gov/Key_Issues/Financial_Regulatory_Reform/FinancialRegulatoryReform/Discussion_Drafts/Amdt_in_nature_of_substitute_to_HR_2609_10_16_09.pdf)
   (Reporting by Kevin Drawbaugh, Rachelle Younglai, Christopher Doering, Karey Wutkowski, Charles Abbott, David Lawder in Washington; Karen Brettell, Jonathan Spicer in New York; Editing by Andrew Hay) ((kevin.drawbaugh@thomsonreuters.com; Tel: +1-202-898-8390; Fax: +1-202-488-3459))
Monday, 23 November 2009 20:56:00RTRS [nN23390080] {C}ENDS

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