Work Begins on Compromise Financial Reform Bill

Lora Bentley

The House of Representatives passed its version of a financial regulatory reform bill in December. The Senate passed its bill at the end of May. This week, negotiators from both chambers begin hammering out their differences to reach a compromise.


The list of legislators who will sit on the conference committee has yet to be finalized, according to Reuters, but Rep. Barney Frank, D-Mass., will chair the group and Sen. Christopher Dodd, D-Conn., will lead the Senate's negotiating team. Beginning with the Senate bill as a base, the committee hopes to have a compromise bill ready by June 24.


Though most Democrats would like to see "fundamental restructuring" of the banking system, that will likely be avoided in the interest of reaching a compromise, Concept Capital policy analyst Jaret Seiberg told Reuters. "[T]he legislation will hurt the banking sector, but it will not sink it," he said.


Issues that are likely to remain points of contention include rules on derivatives trading, limits on debit card transaction fees and the Volcker rule, which would limit bank trading that is not related to customer needs. Notwithstanding these disagreements, however, observers expect some form of financial regulatory reform to be presented to the president by the end of the month.

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