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The Senate has appointed twelve of its members to the House-Senate conference committee that will soon meet to resolve the differences between the financial regulatory reform bills that each body has now passed. (Click here for the recently-finalized text of the Senate-passed bill.) The Senate’s list is below along with the list of representatives that House Financial Services Committee Chairman Barney Frank (D-MA) sent to House Speaker Nancy Pelosi (D-CA) as recommended Democratic conferees. Frank explained the rationale behind his choices in a memo to his committee colleagues; essentially, he picked his subcommittee chairs, with the exception of Carolyn Maloney (whom he selected because she was a subcommittee chair until she took over as Chairman of the Joint Economic Committee at the Speaker’s request).

Frank has also floated the following timetable for the conference, but Financial Services Committee Ranking Republican Spencer Bachus (R-AL) sent Frank a letter yesterday expressing concerns that the timetable is too compressed for legislation of this magnitude. In addition, House Republican Leader John Boehner sent a letter to Speaker Pelosi last week asking for a bipartisan and open conference process, but Republicans have yet to name their conferees. FR Watch will update the timetable and conferee list as more information becomes available. --

Frank’s Proposed Conference Timetable

Tuesday, June 8th- House conferees appointed

Wednesday, June 9th- First open meeting of the conference; organizational issues and opening statements only

Tuesday, June 15th through Thursday, June 17th and Tuesday, June 22nd through Wednesday, June 23rd - Conference meets to consider substantive issues

Thursday, June 24th- Conference concludes and conference report will be filed shortly thereafter

Monday, June 28th - House Rules Committee meets to grant rule for floor consideration

Tuesday, June 29th - House passes the conference report; Senate will have three days to pass the conference report before the July 4th recess.

Senate Banking Committee Members appointed as conferees – Dodd (D-CT), Johnson (D-SD), Reed (D-RI), Schumer (D-NY), Shelby (R-AL), Corker (R-TN), Crapo (R-ID), Gregg (R-NH)

Senate Agriculture Committee Members appointed as conferees – Lincoln (D-AR), Leahy (D-VT), Harkin (D-IA), Chambliss (R-GA)

Chairman Frank’s recommended list of House Conferees --

1. Barney Frank (D-MA) – House Financial Services Committee Chairman

2. Carolyn Maloney (D-NY) -- Joint Economic Committee Chairman

3. Paul Kanjorski (D-PA) -- Subcommittee Chairman on Capital Markets, Insurance, and Government Sponsored Enterprises

4. Luis Gutierrez (D-IL) -- Subcommittee Chairman on Financial Institutions and Consumer Credit

5. Maxine Waters (D-CA) -- Subcommittee Chairman on Housing and Community Opportunity

6. Melvin Watt (D-NC) -- Subcommittee Chairman on Domestic Monetary Policy and Technology

7. Greg Meeks (D-NY) -- Subcommittee Chairman on International Monetary Policy and Trade

8. Dennis Moore (D-KS) -- Subcommittee Chairman on Oversight and Investigations
 

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Aiming to deliver a financial regulatory reform bill to President Obama’s desk before the July 4th recess, this morning Senate Democratic leadership unveiled its list of members charged with reconciling the competing House and Senate versions of the Wall Street Reform and Consumer Protection Act of 2009.

The Senate's lineup of conferees includes seven Democrats and five Republicans, eight of which are members of the Banking Committee and four from the Agriculture Committee:

Banking, Housing and Urban Affairs Committee

• Chairman Christopher Dodd (D-CT)
• Ranking Member Richard Shelby (R-AL)
• Senator Tim Johnson (D-SD)
• Senator Jack Reed (D-RI)
• Senator Chuck Schumer (D-NY)
• Senator Bob Corker (R-TN)
• Senator Mike Crapo (R-ID)
• Senator Judd Gregg (R-NH)

Agriculture Committee

• Chairwoman Blanche Lincoln (D-AR)
• Ranking Member Saxby Chambliss (R-GA)
• Senator Patrick Leahy (D-VT)
• Senator Tom Harkin (D-IA)

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 By a vote of 59 to 39, the Senate tonight passed the financial regulatory reform package it has been debating for the past few weeks.  Four Republicans -- Senators Chuck Grassley (IA), Olympia Snowe (ME), Susan Collins (ME), and Scott Brown (MA) -- broke ranks and voted with all but two Democrats to pass the bill.  The two Democrats who voted against the bill were Senators Russ Feingold (WI) and Maria Cantwell (WA).  The next step in the process will be reconciling the House and Senate-passed bills in a conference committee. The White House and Congressional leadership have said they expect to have the legislation ready for the president's signature by the Fourth of July. 

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Without any votes to spare, the Senate this afternoon approved, by a tally of 60-40, a motion to limit debate on the Restoring American Financial Stability Act of 2010 (S.3217), effectively bringing the Senate’s debate over financial reform to its final stages. Senate Majority Leader Harry Reid (D-NV) says he is now aiming to complete the bill tonight following the consideration of a handful of remaining amendments.

After falling just short of garnering the necessary 60 votes to invoke cloture during yesterday’s session, Senate Democrats were able to pick-up the support of  Sen. Scott Brown (R-MA)—who joined GOP colleagues Olympia Snowe and Susan Collins of Maine as the only Republicans to support cloture—along with Sen. Arlen Specter (D-PA), who was absent during Wednesday’s session. For the second day in a row, Sens. Maria Cantwell (D-WA) and Russ Feingold (D-WI) voted in opposition. Brown appears to have switched his vote after receiving assurances from Democratic leadership that the bill’s proprietary trading ban would be modified in order to shield the insurance industry.

As a result of the successful cloture motion, only amendments deemed “germane” to the legislation will be eligible for consideration, ultimately nixing the possibility for consideration of most of the pending amendments. Amendments likely for consideration are a proposal offered by Sen. Sam Brownback (R-KS) to exempt automobile dealers from the regulatory purview of a newly-created Consumer Financial Protection Bureau (CFPB) and an amendment from Sens. Jeff Merkley (D-OR) and Carl Levin (D-MI) that would explicitly prohibit banks and bank holding companies from engaging in proprietary trading activities.

With the votes secured, we expect Democratic leadership to wrap things up either tonight or tomorrow morning.
 

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Falling short of the necessary 60 votes to cut off debate on the Restoring American Financial Stability Act of 2010 (S.3217), a motion to invoke cloture failed in the Senate this afternoon by a vote of 57-42.

Although Maine’s Republican Senators Olympia Snowe and Susan Collins decided to break rank with their GOP colleagues by supporting cloture, Senate Majority Leader Harry Reid (D-NV) was unable to keep his caucus in line, ultimately losing the votes of both Maria Cantwell (D-WA) and Russ Feingold (D-WI). In a parliamentary maneuver, Reid switched his vote in order to reconsider the cloture motion at a time that has yet to be determined.

Both Reid and Senate Banking Committee Chairman Christopher Dodd (D-CT) must now return to the negotiating table in order to establish a timeline for the consideration of additional amendments. Until then, the magic number of 60 remains elusive.

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Senate Majority Leader Harry Reid (D-NV) has teed up a critical vote today at 2 p.m. on the motion to invoke cloture, or limit debate, on the financial regulatory reform legislation, representing the first major step in wrapping up nearly a month of Senate debate.

If cloture is invoked—and Reid says he has commitments from Republican senators in order to garner the necessary 60 votes, despite the cries of a handful of Democrats who are seeking additional floor time for the consideration of their amendments—the Senate will likely vote on final passage of the Restoring American Financial Stability Act of 2010 (S.3217) on Friday.

Although the filing deadline for amendments has passed, Senate Banking Committee Chairman Christopher Dodd (D-CT) and Ranking Member Richard Shelby (R-AL) continue to negotiate a resolution to the remaining amendments that have been offered by senators on both sides of the aisle. Reportedly, Dodd has now approved roughly 40 amendments that will be incorporated into a single manager’s amendment that will be offered this week.

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After wrapping up another eventful voting week that involved the consideration of nearly 15 amendments to the Restoring American Financial Stability Act of 2010 (S.3217), the Senate – and perhaps the Congress – now appears headed towards the finish line on financial regulatory reform.

Despite the numerous votes, Senate Banking Committee Chairman Christopher Dodd’s (D-CT) overhaul legislation escaped relatively unscathed from problematic amendments that could have disrupted future conference negotiations with the House, as a flurry of proposals – including those related to credit rating agencies, Fannie Mae and Freddie Mac, community banks, oversight of the Federal Reserve’s monetary policy, underwriting standards, the newly-created consumer financial protection bureau (CFPB) and interchange fees – all were brought up for consideration (see below for additional details on amendments). When the chamber returns to action next week, Senate Majority Leader Harry Reid (D-NV) is expected to set up a vote that will occur on Wednesday to invoke cloture – or limit further debate to 30 hours – which if approved, would likely lead to the bill’s final passage later in the week. Some sources around Capitol Hill are even predicting that after the Senate completes its work, House Financial Services Chairman Barney Frank (D-MA) and fellow Democrats will push for House passage of the Senate bill, precluding the need for a formal conference and ultimately shortening the timeline for the President’s signature.

But predictions aside, Dodd must still contend with the burgeoning frustration of his Democratic colleagues in the Senate, who expressed dismay this week that only 31 amendments out of the over 300 introduced have been formally debated on the floor thus far. In addition, particular contention still lingers with respect to the legislation’s provisions regulating derivatives transactions, specifically the scope of the bill’s "commercial end-user" exemption and its prohibition on commercial banks and bank holding companies from directly engaging in derivatives transactions. The Senate rejected, 39-59, a Republican derivatives proposal offered by Senators Saxby Chambliss (GA), Richard Shelby (AL), Judd Gregg (NH) that sought to limit the types of swaps transactions that would face clearing requirements by exempting “bona-fide hedging swap transactions.”
 

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Following a nearly three-day logjam, the Senate is now voting , and voting often, as leaders on both sides continue to queue up a broad array of amendments dealing with nearly every component of the Restoring American Financial Stability Act of 2010 (S. 3217).

Yesterday, the Senate jumpstarted the amendment process by passing overwhelmingly two proposals aimed at ending “Too Big To Fail” through modifications to the bill’s resolution authority language. The first amendment, offered by Senator Barbara Boxer (D-CA), attaches language specifying that “no taxpayer funds shall be used to prevent the liquidation of any financial company”; and the second amendment, offered by Senators Christopher Dodd (D-CT) and Richard Shelby (R-AL), removes the controversial $50 billion fund that would have been used to finance the resolution of failing financial institutions and would limit the payments received by creditors during liquidation. The Boxer amendment passed by a vote of 96-1 and the Dodd-Shelby amendment was approved 93-5.

Although both parties were able to resolve the “Too Big Too Fail” dilemma relatively peacefully through closed door negotiations, the gulf between Democrats and Republicans over a contentious proposal to create a new consumer financial protection bureau (CFPB) may prove to be more difficult. At some point today, the Senate is expected to consider an alternative GOP proposal offered by Shelby and Senate Minority Leader Mitch McConnell that would, as opposed to the current Dodd proposal that places the CFPB within the Federal Reserve, put the new bureau inside the FDIC and grant its board with significant oversight authority over the bureau's rulemaking decisions. The Shelby-McConnell proposal would also limit the bureau’s authority to that of rulemaking, as banking regulators would retain their enforcement and supervisory authority. But nonetheless, the GOP alternative’s prospects of passage are dismal by most accounts.

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The stalemate is over, and the Senate will begin voting on on amendments to the Restoring American Financial Stability Act of 2010 (S. 3217) this afternoon. As of noon today, there were nearly 100 amendments filed and that number is expected to increase. It is unclear yet which amendments will require 60 votes to pass -- since the possibility of a filibuster constantly looms in the Senate -- but Senate Banking Committee Chairman Chris Dodd (D-CT) cleared six amendments for consideration this afternoon.

The breakthrough occurred earlier today, when Sen. Dodd announced that he and Ranking Member Richard Shelby (R-AL) reached a formal agreement on modifications aimed at ending "Too Big To Fail" – an issue on which Republicans have focused their opposition. GOP Senators have repeatedly argued that the proposed $50 billion "Orderly Liquidation Fund" to help finance the resolution of failing financial institutions would only serve to perpetuate taxpayer-funded bailouts.

According to Dodd, the latest agreement would remove the $50 billion fund and would instead require both creditors and the financial industry to reimburse the government, but only after an FDIC-led resolution occurs. In addition, the agreement includes 1. A "clawback" provision that requires creditors to pay back amounts received under an orderly resolution that exceed the amount the creditors would have received through liquidation or bankruptcy; 2. An authorization for federal regulators to break up institutions that pose a "grave threat to the financial stability of the United States"; and 3. Further limitations on the Federal Reserve’s ability to invoke its emergency 13(3) authority, which allows any individual, partnership or corporation in "unusual and exigent circumstances" to access the Fed's discount window.

Along with the Dodd-Shelby amendment and a Republican proposal that is expected to deal with consumer protection, the Senate will also consider the following amendments this afternoon:

• Senator Barbara Boxer (D-CA) - An amendment specifying that “no taxpayer funds shall be used to prevent the liquidation of any financial company."
• Senator Olympia Snowe (R-ME) - An amendment that strikes language that forces banks to disclose certain customer data; and a second amendment that seeks to maintain credit opportunities for small business owners by preserving their ability to use their homes as collateral.
• Senators Jon Tester (D-MT) and Kay Bailey Hutchison (R-TX) - An amendment requiring the FDIC to implement risk-based assessments in order to charge riskier banks with higher premiums over less-leveraged banks.

With "Too Big to Fail" apparently resolved, the only other speed bumps ahead are derivatives and the consumer financial protection regulator -- both complex and controversial. Financial reform is expected to continue dominating Senate floor time for the remainder of this week, all of next week, and into most of the following week.

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