By Brady Dennis
Washington Post Staff Writer
Tuesday, May 18, 2010; A15
Democratic leaders gave notice late Monday that they intend to wind down the weeks-long debate over new financial regulations, even as lawmakers continued to churn through proposed changes to the massive bill.
"This cannot be delayed any longer," Majority Leader Harry M. Reid (D-Nev.) said Monday afternoon on the Senate floor.
Hours later, he and other senators filed a motion, known as cloture, that sets up a likely vote on Wednesday to limit further debate and paves the way for a final vote on the bill, potentially by week's end.
The wide-ranging legislation -- a top Obama administration priority -- would create a new consumer protection watchdog, establish oversight of the vast derivatives market and give the government authority to wind down large, troubled financial companies. The bill would also create a council of regulators to monitor risks to the financial system and give shareholders more say in how corporations are run.
The House passed its revamp of financial regulations in December. If the Senate approves its bill, as expected, lawmakers must then reconcile the two versions in a conference process.
Before that can happen, however, significant issues remain unsettled in the Senate.
Lawmakers have yet to vote on an amendment offered by Sens. Jeff Merkley (D-Ore.) and Carl M. Levin (D-Mich.) that would ban banks from making speculative investments using their own capital, known as proprietary trading, and from owning hedge funds or private-equity funds. The measure has numerous co-sponsors and the backing of Sen. Christopher J. Dodd (D-Conn.), the architect of the current Senate bill. But the proposal has encountered stiff opposition from Wall Street.
Lawmakers also have yet to resolve concerns -- widespread in Washington and on Wall Street -- about a provision from Sen. Blanche Lincoln (D-Ark.) that could force big banks to spin off their lucrative derivatives trading operations. Sens. Maria Cantwell (D-Wash.) and John McCain (R-Ariz.) are pushing to re-introduce the Depression-era Glass-Steagall provision, repealed in 1999, that separated commercial from investment banking. And a divisive vote looms about whether to exempt U.S. auto dealers from the reach of the new consumer watchdog.
Of the more than 300 proposed amendments to the bill, most won't get aired on the Senate floor. But Reid vowed that he and Dodd would consider as many changes as possible before the votes this week.
Lawmakers chipped away at the list into Monday evening.
They unanimously approved an amendment offered by Sen. John Cornyn (R-Tex.), prompted by the recent bailout of Greece, which aims to prevent U.S. taxpayer-funded bailouts of foreign governments. The measure would require the Obama administration to evaluate any proposed bailout of another nation in which its public debt exceeds its annual gross domestic product.
Administration officials would advise Congress on whether the proposed loan would be repaid, and if not, would be required to oppose the bailout and vote against it at the International Monetary Fund. Dodd said the provision needed work but that the "thrust of the amendment is the correct one."
Senators passed by voice vote an amendment offered by Sens. Kay Bailey Hutchison (R-Tex.) and John D. Rockefeller IV (D-W. Va.) that preserves the Federal Trade Commission's consumer protection powers, saying that the consumer regulator created by the current Senate bill threatened to inhibit the FTC's power to write rules governing non-financial entities. "We don't need to reinvent the wheel," Hutchison said.
Lawmakers also gave swift approval to a measure from Sen. Mark Udall (D-Colo.) enabling consumers to get free access to their credit scores. Current federal law allows consumers to obtain one free copy of their credit report each year, but does not allow them access to their credit score, routinely used by lenders to determine whether a borrower is qualified for a car or home loan.