Democrats Hope for Financial Reform Passage This Week
Senate Majority Leader Harry Reid, D-Nev., filed a procedural motion called cloture Monday evening to end debate on the financial reform bill that has been working its way through the Senate, setting up a vote on the legislation as early as Thursday.
The Senate has been voting on some of the more than 200 amendments filed to the bill, including passing changes last week to ban liar loans and mortgage kickbacks, exempting small businesses from consumer regulations, and keeping regional Feds as the overseer of small banks.
In the past several days, several significant amendments have passed the Senate with more than 60 votes. Among them:
Reforming Credit Ratings Agencies | Last Thursday, two amendments aimed at credit rating agencies — players such as Standard and Poor’s and Moody’s that gave bad financial products inflated ratings — were passed, though the two changes don’t necessarily work hand in hand. One, sponsored by Sen. Al Franken, D-Minn., would create an independent board that would choose which agency rates a security. Now, financial institutions can shop around and use whichever ratings agency they want (or that gives them the best rating).
But the other amendment, this one sponsored by Sens. George LeMieux, R-Fla., and Maria Cantwell, D-Wash., would push government and the financial industry to come up with a new alternative to ratings agencies by writing them out of major financial services laws. If the bill passes, the compromise will likely be worked out in committee with the House.
Curbing Debit Card Fees | Also last Thursday, the Senate voted 64-33 to allow the Fed to regulate the “swipe fees” that financial institutions charge businesses when customers use debit cards. Such fees typically range from 1 to 3 percent of the purchase, according to the NYT. (There’s much more here.) Sen. Dick Durbin, D-Ill., who sponsored the amendment, said that financial companies have been charging “outrageous” fees and that the new rule would direct the Fed to set “reasonable and proportional” fees relative to the transaction processing cost.
Free Access to Credit Scores | Late Monday, the Senate voted in favor of an amendment, introduced by Sen. Mark Udall, D-Colo., that would allow a consumer who has been turned down for a loan, denied a job or charged a higher interest rate because of something in his or her credit report to get a free copy of the credit scores used by institutions in their decisions.
And Tuesday afternoon, key Democrats have reportedly struck a deal on an amendment concerning state powers over big banks. Under the reported deal, state attorneys general will be empowered to enforce rules written by the new proposed Consumer Financial Protection Agency, but they will not be allowed to bring federal lawsuits against national banks. The amendment will be unveiled Tuesday by Sen. Thomas Carper, D-Del.
We will have more on the financial reform bill as it makes its way through the Senate on the NewsHour this week.