CFTC Chairman Gary Gensler (Bloomberg)

The rumor is that Gary Gensler, the Goldman Sachs trader turned Wall Street regulator, may see his time atop the Commodities Futures Trading Commission end in July. The question is whether he can finish perhaps the most important piece of financial reform before he’s out – or whether the House will manage to stop him.

Pop quiz: What do the following financial crises -- AIG, Lehman Brothers, Citigroup off-balance sheet SIVs, Bear Stearns, Long-Term Capital Management, and the "London Whale" of JP Morgan -- all have in common? According to a speech given by Gensler earlier this month, they all involved exposures to derivatives across countries.

AIG Financial products was run out of London as a branch of a French-registered bank. The U.S. Lehman Brothers Holdings guaranteed 130,000 outstanding swaps contracts from their London affiliate. Citigroup’s off-balance sheet financial instruments were launched from London and incorporated in the Cayman Islands. The two Bear Stearns hedge funds that collapsed, precipitating the firm’s failure and the taxpayer rescue, were incorporated in the Cayman Islands. Long Term Capital Management’s swaps were booked in a Cayman Islands affiliate (that according to Gensler, who was with Treasury at the time of their 1990s collapse, was basically a P.O. Box). And, as the name stipulates, the London Whale trades of JPMorgan Chase were in London.

This is the issue Gensler is racing to address before the end of his term. As Marcus Stanley, of Americans for Financial Reform, notes to Erika Eichelberger of Mother Jones, “Wall Street banks routinely transact more than half their derivatives through foreign subsidiaries.” So a natural part of financial reform would be to make sure that the trades that go on with these foreign affiliates have to follow the same rules as firms in the United States. You shouldn’t be able to evade regulations by opening a P.O. Box in a foreign country.

The financial industry disagrees, of course. And they’ve found some friends on Capitol Hill to help them. Recently, the House voted to repeal this part of financial reform – though on a mostly partly-line vote. Erika Eichelberger of Mother Jones wrote that “most Democrats voted against the bill—something one financial reformer calls a ‘miracle’—signaling a tougher-than-expected road ahead for similar efforts to scale back new rules on banks that crashed the economy a few years ago.” That means the repeal bill will likely fail in the Senate.

Still a number of Democrats voted to repeal these rules. Congressman and current Center for American Progress fellow Brad Miller argues that fundraising is central to this problem. Democrats, especially new ones, have to spend so much time fundraising that they end up listening to, and absorbing, the criticisms and priorities of Wall Street. (There’s no equivalent time for them to listen to those unemployed or whose neighborhoods have been devastated by foreclosures for balance.) As time goes on, and the memory of the crisis fades into the background, this will become even more of an issue.

Gensler has made it clear that making sure tough rules on cross-border exposures become the law of the land. The question remains: Will he finish it in time? And either way, will his successor believe that this issue is as critical as Gensler does?