–Senate Banking’s Dodd, House Financial Services’ Frank To Lead Talks
–Formal House-Senate Conference Committee To Start Soon
–Hill Leaders Seek Final Deal By July 4th Recess
–Hill Talks To Focus on Fed, Derivatives, Consumer Agency

By John Shaw

WASHINGTON (MNI) – With the Senate following the House and passing
a sweeping financial services regulatory reform bill, it now seems
certain that Congress will pass a bill that President Obama will be
eager to sign sometime this summer.

But it remains unclear how the final bill will deal with a host of
critical issues because the House and Senate bills have different
provisions.

The differences in the two bills will be worked out by a
House-Senate conference committee that will be presided over by Senate
Banking Committee Chairman Chris Dodd and House Financial Services
Committee Chairman Barney Frank.

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.

But Frank and Dodd are expected to take the lead role in the
negotiations over a final bill, with critical 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.

Dodd and Frank are now meeting with President Obama.

Frank, in remarks to reporters Thursday, said that crafting a final
bill will not be that difficult.

“It’s not a hard bill to conference,” he said. “I don’t see any
issues that prevent this from going forward,” he added.

Frank has frequently called for public House-Senate conference
deliberations which could be televised on C-SPAN. But there will be
plenty of 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, adding that
“nothing will be ratified without a public debate.”

The House approved a sweeping bill in December that differs from
the Senate version in a number of ways. Frank said he would like a final
bill to be approved and sent to Obama by July 4th.

The Senate’s regulatory reform bill, largely drafted by Dodd,
establishes a new independent Consumer Protection Bureau at the Federal
Reserve Board, creates a process to liquidate failed financial firms,
sets up a council of regulators to oversee systemic risk in the economy,
establishes a regulatory structure for over-the-counter derivatives,
requires hedge funds that manage over $100 million to register with the
SEC and creates a new office within Treasury to monitor the insurance
industry.

The House bill, passed in December, is broadly similar but differs
in many particulars.

One of the main issues will be regulating of over-the-counter
derivatives. 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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