–Senate Approves Resolutions Related To Autos, Proprietary Trading
–Formal House-Senate Conference Committee To Start Soon
–Hill Leaders Seek Final Deal By July 4th Recess

By John Shaw

WASHINGTON (MNI) – In a pair of votes that served as a prelude to
the effort to craft a final financial services regulatory reform bill,
the Senate approved Monday evening two non-binding amendments to the
underlying bill that was passed by the Senate last week.

The Senate voted 60 to 30 for a motion by Republican senator Sam
Brownback to urge those drafting the final bill to exempt auto dealers
from jurisdiction of a new bureau of consumer financial protection.

The Senate voted 87 to 4 for a motion by Republican senator Kay
Bailey Hutchison and Democratic senator Kay Hagan regarding how limits
to proprietary trading should apply to insurance companies which have
different capital standards than banks.

House and Senate leaders are set to begin efforts to craft a
compromise financial regulatory reform bill this week by appointing the
members of the conference committee that will be charged to draft the
final bill.

The House passed its regulatory reform bill in December of 2009
while the Senate approved its bill last week.

The conference committee will work to reconcile the House and
Senate passed financial regulatory reform bills. Any compromise must
then be approved by the House and Senate.

Senate Banking Committee Chairman Chris Dodd and House Financial
Services Committee Chairman Barney Frank will preside over the
conference committee.

The top Republicans on these panels will be part of the conference
deliberations as will be the chairmen and ranking members of the House
and Senate Agriculture committees.

Dodd and Frank met with President Obama Friday and both lawmakers
said it should not be difficult to draft a compromise bill.

“This is one of the rare occasions when the two bills really are
very close to each other,” Dodd said Friday.

Frank and Dodd are expected to take the lead role in the
negotiations over a final bill, with key input from House Speaker Nancy
Pelosi, Senate Majority Leader Harry Reid, Treasury Secretary Tim
Geithner, White House Chief of Staff Rahm Emanuel–and even President
Obama.

Frank has frequently called for public House-Senate conference
deliberations which could be televised on C-SPAN. But there will be many
private talks that will occur.

“The negotiations will be on in private but the results of any
discussions are going to have to be voted on,” Frank said last week,
adding that “nothing will be ratified without a public debate.”

Both Dodd and Frank said they would like a final bill to be
approved and sent to Obama by July 4th.

One of the main issues to be resolved will be how to regulate the
over-the-counter derivatives market. Both the House and Senate bill
require most derivatives to be traded through third parties, but the
Senate bill has fewer exemptions for end-users. Additionally, the Senate
version would force banks to spin off their derivatives units.

The two bills require expanded audits of the Federal Reserve Board,
but the House version is both more expansive and intrusive and would
include some monetary decisions made by the Fed.

The two bills also differ on the precise powers of a new consumer
protection entity; the House bill creates a stand-alone agency while the
Senate bill places it within the Fed.

** Market News International Washington Bureau: (202) 371-2121 **

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