What’s next for financial regulatory reform

February 12, 2010

With healthcare on ice, financial reform is the hottest game in town. Now Dodd is trying to bypass Shelby to somehow gin up a bipartisan bill with Corker —  who takes the issue extremely seriously. A few thoughts:

1) A CFPA is still the stickler. GOP, including Corker probably, will only accept a non stand-alone regulator will narrow rule-writing and enforcement powers. But  CFPA is dominant issue for Obama WH.

2) Corker is more easily undercut by McConnell than old bull Shelby. If McConnell doesn’t want a bill, there will not  be a bill.  At this point, the smart betting is that GOP views denying Dems a victory more important than anti-populist backlash for opposing reform. They will label it a bailout bill if there is even a hint at giving Treasury TARP 2.0 powers. But if it is watered-down enough, it can pass.

3) If a Dodd-Corker bill gets to the floor, both Left and Right will push a flurry of amendments that they would’t try with Dodd-Shelby. Should be a chaotic mess.

4) Looks like the Volcker rule isn’t going anywhere.

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