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House panel likely to pass final pieces of financial reform

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By Brady Dennis and Lori Montgomery
Washington Post Staff Writer
Wednesday, December 2, 2009

The final pieces of a package to overhaul the financial regulatory system are expected to win approval Wednesday from a key House committee with the support of black lawmakers who previously blocked the legislation to protest President Obama's handling of the economy.

House Financial Services Chairman Barney Frank (D-Mass.) said in an interview Tuesday that members of the Congressional Black Caucus had made sufficient progress in talks with the administration to permit the legislation to move forward. House leaders plan to bring the measure before the full chamber for a vote next week, Frank said.

The committee is scheduled to vote Wednesday on measures to deal with systemic risks posed by large troubled financial firms and to establish a federal office to monitor the insurance industry. The panel has passed bills to regulate derivatives and to create a consumer financial protection agency as part of the regulatory overhaul.

The caucus, led by Rep. Maxine Waters (Calif.), the number two Democrat on Frank's committee, met late Tuesday. Caucus members declined to comment this week on whether they would agree to advance the legislation, one of Obama's top priorities.

But committee spokesman Steve Adamske said there was no sign that caucus members would further delay the bill.

"We don't have any indication that it's not [going forward] at this point," Adamske said. "We've largely been out of the deliberations between the White House and the CBC. It's not about the base bill."

The pending legislation stalled nearly two weeks ago when caucus members -- 10 of whom serve on Frank's committee -- unexpectedly blocked the vote to draw attention to their concerns. Earlier this month, they had shared their frustrations during a meeting held by Frank and attended by Treasury Secretary Timothy F. Geithner and White House Chief of Staff Rahm Emanuel.

Frank said the caucus expressed concerns about whether minorities were being fairly represented in helping to carry out Treasury's bailout programs and other federal efforts related to the financial crisis. He said Tuesday that members are pushing for greater involvement by minorities across government programs, from efforts to help small businesses to contracts involving the Defense Department and the U.S. Census.

It remained unclear whether the caucus had received any promises from the administration. A spokesman for Waters said only that "members are keeping things very close to the vest on this." Other caucus members also have declined to discuss their demands publicly.

"The president's top priority is economic recovery, and we understand the profound impact that the recession is having on the African American community," White House spokeswoman Jen Psaki said Tuesday. "We welcome a continuing dialogue with the CBC on how we can collaborate to implement the president's agenda to support economic growth and opportunity for all Americans."

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