Financial Regulatory Forum

FACTBOX-Key amendments to Wall Street reform bill in US Senate

By Reuters Staff
April 30, 2010

WASHINGTON, April 29 (Reuters) – More than 100 amendments were circulating on Thursday in the U.S. Senate as debate began on a sweeping bill to overhaul financial regulation.

Here are snapshots of some of them, which the Senate will be dealing with over the next two weeks or so, and a link to the full roster. No votes on amendments are expected before Tuesday.

* Drop swap-trading desk spin-off rule

The amendment would kill a provision of the Democrats’ bill that would force banks to divest their swaps-trading desks.

* Strengthen “Volcker rule”

The amendment would strengthen a part of the main Democratic bill dealing with a proposal from President Barack Obama and economic adviser Paul Volcker that would bar banks from proprietary trading for their own accounts, unrelated to the needs of their customers. The amendment would widen the rule to apply not only to banks, but also to large, interconnected nonbank financial institutions.

* Reinstate Glass-Steagall

Financial giants could be broken up under an amendment to reinstate the 1930s-era Glass-Steagall laws that barred large banks from affiliating with securities firms and insurers.

Those limits were largely repealed in 1999, a high-water mark for deregulation that critics say marked the beginning of changes that culminated in the 2008-2009 financial debacle.

Passage of the amendment could force firms at the center of the crisis — such as Goldman Sachs, Morgan Stanley, Citigroup, JPMorgan Chase and Wells Fargo — to spin off investment and insurance operations.

* Make consumer watchdog an agency

The Democrats’ bill would create a financial consumer watchdog bureau inside the Federal Reserve that would regulate mortgages and credit cards. Some Democrats want the watchdog to be an independent agency, with more independence and clout than a Fed unit, and will offer an amendment to do that.

* Limit size of banks as percentage of GDP

The amendment would impose a strict cap of 10 percent on any bank holding company’s share of total insured U.S. deposits. It would limit the size of non-deposit liabilities at financial institutions to 2 percent of gross domestic product for banks, and 3 percent of GDP for nonbank institutions. And it would set a 6 percent leverage limit for bank holding companies and selected nonbank financial institutions.

* Auto dealer exemption

Amendment would exempt auto dealers from the full reach of the consumer watchdog if the dealers do not finance their own lending to car buyers.

* Private equity, venture capital fund oversight

The amendment would require managers of private equity and venture capital funds to register with the Securities and Exchange Commission. The Democratic bill in the Senate would only require hedge fund managers to register with the SEC.

* Reversal of Supreme Court ruling on Stoneridge

The amendment would clear the way for shareholders to sue third parties such as banks, lawyers and accountants that are not directly involved in a securities fraud cases.

A 2008 Supreme Court decision in the Stoneridge case helped protect those that aid and abet financial fraud.

* Auditing the Federal Reserve

This amendment would affect the Government Accountability Office’s authority to audit the Fed. Currently, the GAO is banned from auditing monetary policy and interaction between the Fed and other central banks.

To see a full roster of amendments to the bill, please click here:  http://thomas.loc.gov/cgi-bin/bdquery/z?d111:s.03217:

(Reporting by Kevin Drawbaugh and Rachelle Younglai; Editing by Leslie Adler) ((kevin.drawbaugh@thomsonreuters.com, +1 202 898 8390, +1 202 488 3459 (fax)))

Comments
3 comments so far | RSS Comments RSS

Dead link to amendments on Thomas… it’s a quirky system and only allows 15 minutes on a search then requires new search…

Might be better to just link to Thomas homepage which has the S 3271 highlighted.

Posted by Cate_Long | Report as abusive
 

Bring back Glass-Steagall Act and stop COMMERCIAL BANKS from underwriting and trading securities by forcing them to spin off their investment banking divisions.

THOSE THAT FAIL TO LEARN FROM HISTORY ARE DOOMED TO REPEAT IT!!!

click on link to website and send to all of the U.S. Senate and U.S. Congress.

http://en.wikipedia.org/wiki/Glass%E2%80 %93Steagall_Act

Especialy look at paragraph in quotes.

We need more politicians like Carter Glass and Henry Steagall. They were obviously not bought and paid for by the lobbyists for the big commercial banks.

Posted by anniegetyourgun | Report as abusive
 

The debate in the US congress is surrealistic.

The SEC on April 28, 2004, when it allowed the US investment banks to substantially increase their leverage, it did so explicitly stating that “the consolidated computations of allowable capital and risk allowances [be] prepared in a form that is consistent with the Basel Standards”.

If there is anything that has guided the evolution of the current financial regulations, those that I have for so long sustained doomed the world to exactly the type of crisis we now have, that is the Basel Committee. Basel’s AAA-bomb was ignited on June 26 2004, when the G10 countries, which includes the US endorsed the revised capital framework for banks known as the Basel II standards.

Currently, in the over 1300 pages of financial regulations being discussed in the Congress, there is not one single reference to the Basel Committee or its standards. Can it be more surrealistic than that?

Posted by PerKurowski | Report as abusive
 

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