–Republican Senator Collins Says She’s Still Examining Bill
–Sen. Collins: Doesn’t Like $19 Billion Fee on Banks
–Democratic Leaders Huddle On Senate Floor

By John Shaw

WASHINGTON (MNI) – Republican senator Susan Collins said Monday
evening that she is not certain if she will support the final regulatory
reform bill that could come before Congress this week.

In comments to reporters near the Senate floor, Collins said that
she was reviewing the bill carefully before making a decision.

“I’m still taking a look at it,” she said, adding there are many
elements of the bill that she likes.

But she added that she is troubled by the inclusion of a $19
billion fee on banks that she said was placed in the package “in the wee
hours of the night.”

Collins was one of four Republicans who supported the regulatory
reform bill when it was voted on in the Senate in late May. Her support
will be critical if the compromise plan is to pass in the Senate.

Another Republican who supported the initial Senate version of the
regulatory reform bill, Sen. Olympia Snowe, declined to comment to
reporters if she would support the final compromise.

Democratic leaders in the House and Senate are hoping to pass
sweeping financial regulatory reform legislation this week.

However the death of Democratic senator Robert Bryd and the
uncertain status of several senators are complicating the timing of what
is expected to be a close Senate vote.

On the Senate floor Monday evening, Senate Majority Leader Harry
Reid was huddled with Senate Banking Committee Chairman Chris Dodd,
Senate Majority Whip Dick Durbin and two Democratic members of the
Banking Committee — Sen. Chuck Schumer and Sen. Jack Reed.

It is quite likely that the senators were discussing how to proceed
on regulatory reform.

Speaking to reporters Friday morning, both Dodd and House Financial
Services Committee Chairman Barney Frank said they expected the package
to pass Congress this week.

Frank said the House vote could occur as early as Tuesday, adding
that he expects it to pass with almost exclusively Democratic votes.

When the House voted on its initial version of regulatory reform
last December, the bill passed on a 223 to 202 vote, with all
Republicans and 27 Democrats voting against the bill.

Dodd said he expected to need 60 votes to pass the measure in the
Senate and has been in contact with four Senate Republicans who
supported the first Senate version of the bill.

“I feel like we’re in good shape,” to pass the bill in the Senate
next week, Dodd said.

When the Senate passed its version of regulatory reform in late
May, it was approved on a 59 to 39 vote. All Democrats but two — Maria
Cantwell of Washington and Russ Feingold of Wisconsin — voted for the
bill. All Republicans but four voted against it.

The four Republican senators who voted for the bill in late May
were Collins and Snowe of Maine, Chuck Grassley of Iowa and Scott Brown
of Massachusetts.

Brown said Friday that he did not like several features of the
final bill, including the $19 billion bank fee and declined to say if he
would support the bill.

Under congressional rules, a conference committee report can not be
amended on the floor of the House and Senate.

While it will only require a majority vote in the House and Senate
to pass, Senate supporters will have to secure 60 votes to cut off the
debate in the Senate.

The House-Senate conference committee approved Friday legislation
which would make the most sweeping changes to the U.S. regulatory system
since the Great Depression.

The legislation creates a council of regulators to monitor to
economy against systemic threats. It institutes new regulations on hedge
funds and over-the-counter derivatives. The bill creates a Bureau of
Consumer Financial Protection that will oversee mortgage, credit cards
and other credit products. The bill provides for expanded regular audits
of the Federal Reserve by the Government Accountability Act.

The package includes a variation of the Volcker-rule, banning banks
from proprietary trading and limiting them from investing in or
sponsoring hedge funds and private equity funds.

It limits bank investments in private equity or hedge funds to 3%
of a fund’s capital. Total investment in private equity and hedge funds
can’t exceed 3% of a company’s tangible common equity.

The bill would push most OTC derivatives through third party
clearinghouses and onto exchanges or electronic trading systems. It
would force banks to push some of their swaps trading into subsidiaries.

Under the bill, banks will be allowed to keep their derivative
trading operations as long as they are used to hedge risk or trade
interest rates or foreign exchange swaps.

The bill will give federally insured banks up to two years to send
instruments such as uncleared credit default swaps off to a separately
capitalized subsidiary.

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

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