Kohl amendment changed to GAO study on whether financial planning should be regulated

Melanie Waddell

3/23/2010

The Senate Banking Committee approved Monday, March 22 the financial services overhaul bill by a vote of 13-10 (13 Democrats and 10 Republicans). An expected week-long mark-up schedule was cut short when Republican committee members decided over the prior weekend against submitting any amendments to Senate Banking Committee Chairman Christopher Dodd’s bill.

Senator Herb Kohl’s (D-Wisconsin) amendment to the financial services reform bill that would create an independent oversight board to regulate financial planners was not introduced as a separate amendment during mark-up of the bill on March 22. Rather, a manager’s amendment to the bill included a provision calling for a GAO study of the issue.

After the bill passed, Kohl—who is chairman of the Senate Special Committee on Aging—released a statement thanking Dodd for including the GAO study provision, adding that in the Aging Committee, he has “looked at the use of certain financial advisor designations and the impact on elderly consumers. This study would not only help expose any gaps in state and federal regulations, but also look at the use of other designations that are being used to take advantage of consumers.”

Dodd (D-Connecticut) was attempting to get his financial services reform bill, which he released on March 15, completed quickly, and therefore did not include controversial amendments that could isolate Republicans on the committee, sources say. Republican Senator Bob Corker (R-Tennessee) said in the early afternoon of March 22 that the Senate Banking Committee would likely approve the bill that day, with only Democratic votes. Corker said he envisions a full Senate vote after the two-week Easter break, which starts on March 26.

A GAO study of whether to regulate financial planners “makes sense,” sources say, because House Financial Services Committee Chairman Barney Frank’s financial services reform bill, the Wall Street Reform and Consumer Protection Act (H.R. 4173), which was passed last December, also calls for a similar study.

Groups like the Investment Adviser Association (IAA) opposed Kohl’s amendment, arguing it would have placed more regulation on investment advisors who are already regulated and abide by a fiduciary standard. As for the GAO study, Neil Simon, VP for government relations at IAA, says “it is entirely appropriate to study whether financial planning should be regulated as a distinct financial service provider, and, if so, how it should be regulated.” Clearly, he adds, “there have been abuses involving persons who are not regulated under state or federal law who, [unlike] investment advisors, are [not] subject to a fiduciary standard.”

http://www.investmentadvisor.com/news/2010/3/Pages/Banking-Committee-Passes-Financial-Reform-Bill.aspx

Maybe another hopeful story? Hmmmmm
Sen. Bob Corker 'Abandoned' By GOP Leadership Over Bank Reform Outreach

GOP Senator Bob Corker was emphatic on Wednesday that Republicans missed a big opportunity to influence what is perhaps the most ambitious financial reform bill to pass through the Senate since the Great Depression.

Republicans declined to offer any amendments during Monday's scheduled mark-up of the bill, choosing instead to vote against sending the legislation to the Senate floor strictly along party lines. It passed out of the Senate Banking Committee with 13 Democrats in favor and 10 Republicans opposed.

Failing to reach a bipartisan deal in committee was "a very large strategic mistake," the Tennessee senator told reporters after his speech before a U.S. Chamber of Commerce summit in Washington. Declining to offer amendments, and then passing the bill out of committee along party lines, "talks about how dysfunctional, how dysfunctional we have been as a committee and the Senate has been in addressing this issue," Corker said in reference to financial reform.

Prior to Monday's meeting, Corker told the Huffington Post that, "You're probably going to witness one of the most dysfunctional committee meetings in Senate history."

On Wednesday, his tone remained the same.

"We had an opportunity to pass out a bill out of our committee in a bipartisan way, and then stand on the Senate floor and hold hands and say that we would keep amendments that were unnecessary and improper from coming onto this bill," Corker said. "Instead of that, it's been decided that we are going to try to negotiate now ...

"I think it's going to be far more difficult now that this has passed out of committee ... I think we have made a very, very large mistake, and I regret that."

Banking committee Chairman Christopher Dodd (D-Conn.) told HuffPost that "what [Corker] said was his Republican leadership abandoned him."

"They decided they wanted to say 'No' again," Dodd said. "So we went ahead ... If you don't even want to offer yours, I couldn't -- if anyone wanted to offer amendments, I would have been there. They made a decision not to. That was their call. Not mine. And listen, I understand why they wanted to do it."

Corker blamed Richard Shelby, the top Republican on the committee, for failing to reach a compromise on legislation with Dodd last year, reports Marketwatch.

"It would have been better had Senator Shelby negotiated a bipartisan bill last September, October or November," Corker said. "We could have had a bipartisan bill that passed." [It should be noted that Dodd didn't begin working with Shelby until November]

Part of Corker's regret going forward stems from the difficulty that Republicans may have in staying unified.

"It's going to be very, very difficult -- very difficult -- to get 41 members to hold, especially, especially if many of the provisions in this bill address concerns that everyday people on Main Street have," said Corker. "That's why I thought it was so important to leave that committee -- maybe lose three Republicans, lose three Democrats -- but to end up with a middle-of-the-road bill that we can all hold hands and fight off amendments."

After talks between Dodd and the top Republican on the committee, Richard Shelby of Alabama, hit an impasse, Dodd reached out to Corker. The two began negotiating on the bill, but again Dodd and a Republican failed to reach agreement.

The sticking point has been the proposed consumer financial protection agency, a dedicated entity to be charged with protecting borrowers from abusive lenders. Progressive Democrats want an independent agency to look after consumers; Republicans -- and some bank-friendly Democrats -- want the new unit to either be a part of a bank regulator, subject to the whims of a bank regulator, or simply not be formed at all. Corker, like Shelby, opposes an independent agency. Corker has called it a "nonstarter."

The political problem, Corker said, is that the fight to fix the nation's broken financial system is fundamentally different from the fight to reform health care or health insurance.

"You don't pull the game book out for health care -- I'm sorry -- and apply that to financial reform. And anybody who's thought that -- and unfortunately I think there have been people who've thought that -- are way mistaken. I'm sorry -- there's a whole different dynamic around financial reform," Corker said. "That's why I've worked so hard and, you know, almost begged Chairman Dodd ... to please let's do this in a bipartisan way."

Republicans had their chance, but squandered it, he said. Asked about the deal apparently reached over the weekend to not offer any amendments, Corker said: "To be candid, by the time this weekend came, the real issue was when will the negotiations end."

"The leverage that existed up until Monday night is gone, and I think it's far more difficult to get us where we need to go as a country, and I regret that," he added.

But last week, the president and CEO of the American Bankers Association, Ed Yingling, had a different perspective, arguing that the more time passes, the more emboldened Republicans can be.

"From the Republicans' point of view every week that passes is, say Senator Shelby, more leverage. And a lot of what this is about is leverage to get your best deal," Yingling told a crowd of bankers at an ABA summit. "So it's in the interest of the Republicans to slow things down because that gives them more leverage to negotiate."

Asked if the decision not to debate the bill Monday was "the [Republican] leadership's initiative ... or Senator Shelby's," Corker replied:

"You know, for some reason ... I don't know, you can probe into this yourself, there hasn't been a desire to get us in a bipartisan place, and I find that...let me say this: All I can say is negotiations between Senator Shelby and Senator Dodd just never worked. They never went anywhere. I don't know what the reason was."

But for now, Corker said he'll go along with the Republican leadership.

"I'm going to fold in behind Senator Shelby and continue to work in an appropriate, positive way, and I hope we're going to get there," Corker said. "I'm not giving up. I'm just saying that when a bill leaves a committee like it left this week, without bipartisan support, and it goes to the floor in a dynamic like we have right now, where the White House is very emboldened, I think that creates lots of issues."

http://www.huffingtonpost.com/2010/03/25/bob-corker-republican-on_n_512600.html

Dodd: GOP Leader Lied About Finance Bill
Senator delivers blistering speech on "naked political strategy" by Republicans.
By Kevin G. Hall

WASHINGTON | The architect of sweeping legislation that would revamp financial regulation took the Senate floor on Wednesday to accuse the Senate Republican leader of lying about the bill and being in Wall Street's back pocket.

Senate Banking Committee Chairman Christopher Dodd, D-Conn., delivered a blistering, 20-minute speech that included the revelation of a political talking points memo from a Republican strategist that was virtually verbatim to the criticism voiced Tuesday by Senate Minority Leader Mitch McConnell, R-Ky.

McConnell had accused Dodd of drafting partisan legislation, even though the Banking Committee chairman has worked for roughly half a year with key Senate Republicans and incorporated many of their ideas into his bill. McConnell also said the bill continues controversial bank bailouts, but it doesn't.

"It's a naked political strategy," thundered a visibly upset Dodd.

He held up a leaked memo attributed to GOP strategist Frank Luntz that advises Republican lawmakers to accuse Dodd and other Democrats of perpetuating bailouts for giant banks.

The public disliked the bank bailouts, so framing the Democrats' financial overhaul legislation as a "bailout" could win Republicans votes.

"Nothing could be further from the truth. The bill as drafted ends bailouts," Dodd said, describing how regulators would get new powers to dissolve large financial institutions, even healthy ones if their size is deemed to threaten the broader financial system.

Additionally, the Dodd bill would require large institutions to present plans for how to liquidate their companies, if necessary.

Both the Senate bill and one the House of Representatives passed in December also would create a fund that large financial firms would have to pay into to cover the costs to dissolve their foundering brethren.

http://www.theledger.com/article/20100414/NEWS/4145038/-1/preps01?Title=Dodd-GOP-Leader-Lied-About-Finance-Bill

Democrats Hold The Line Against Wall Street Derivatives Lobbying

Senate Democrats are "resisting a last-ditch lobbying push from big Wall Street firms" and "moving toward a sweeping revamp of financial regulation that would squeeze banks' lucrative derivatives-trading business," the Wall Street Journal reported Wednesday.



Meanwhile, President Barack Obama planned to "turn up the pressure for an overhaul of Wall Street regulations" as he met with congressional leaders this morning, including the Democratic and Republican leaders of both the House and Senate.

The Senate is preparing to take up a sweeping overhaul of financial regulations regimen in less than two weeks. Republican leaders have already promised to reject broad changes proposed by Democrats.

On Tuesday, Sen. Blanche Lincoln (D-Ark.), a generally bank-friendly Democrat, burst the bubbles of Wall Street lobbyists when it became clear that she would support some tough derivatives reforms backed by the White House.

The Obama administration supports removing exemptions in the Senate reform bill for so-called "end users" of derivatives. End users are farmers, airlines, dairy producers or other companies that use derivatives as an integral part of their business, rather than as tools to manipulate the market or profit from speculation. The administration wants derivatives contracts to be traded on exchanges or centrally cleared. Banks are seeking exemptions for end users, however, as a loophole to keep the derivatives market in the dark, as it is currently. Brokers and swaps dealers have been pressuring end users to lobby Congress for an exemption.

"The idea that all end-users of derivatives somehow be absolved from having to clear their trades is something that we do not agree with," Treasury Department Deputy Secretary Neal Wolin said during a briefing with reporters last week, "and we will fight hard to oppose."

On Tuesday, Treasury Secretary Tim Geithner joined in, calling for all derivatives to be cleared transparently on an exchange.

Bank lobbyists have been fighting hard against derivatives reform amid speculation that Wall Street will offer the proposed Consumer Financial Protection Agency to Democrats as a concession for loose rules on derivatives.

On Wednesday, the Wall Street Journal's Peter Eavis editorialized in favor of derivatives reform, arguing that the "benefits of enacting tough new rules outweigh any drawbacks."



Wall Street has been targeting the Agriculture Committee. "I always get lobbied by anybody who has an interest in whatever the issue may be. And there's been no shortage of folks expressing their opinion about this issue," said Sen. Saxby Chambliss (R-Ga.), the committee's ranking Republican.
d.)

"We've been continuing to work with Senator Chambliss and working to find that common ground and figure out where we can be," Lincoln told reporters on her way into a meeting with the Democratic caucus.

The administration is backing Lincoln in a contested primary against progressive challenger Bill Halter, who has the backing of organized labor.

The Agriculture Committee has some jurisdiction over derivatives because they began as simple financial products for farmers -- corn or pork belly futures, for instance -- but have evolved into a roughly $600 trillion market that runs largely unregulated.

The Banking Committee, chaired by Sen. Chris Dodd (D-Conn.), had taken the lead, however, on writing derivatives legislation, though Lincoln's entry into the debate complicates matters.

"We'll dovetail [the two bills] when it comes to the floor," said Lincoln, saying she wanted to move legislation through her committee "soon."

Jim Collura, a lobbyist with the New England Fuel Institute and a lead organizer behind the pro-reform Commodity Markets Oversight Coalition, was briefed Tuesday night by committee staff on Lincoln's proposal. He told HuffPost that he and his coalition allies were greatly encouraged by the shift in Lincoln's direction, but were waiting to see final legislative language before putting out an official statement.

His coalition has been fighting against allowing any exemptions when it comes to derivatives regulation, but Collura said that they were resigned to the fact that there will be at least some carve outs.

"There will be [end-user exemptions]. That's pretty much a foregone conclusion. That's the reality. It'll have to have one for any member of Congress to support it," he said.

The fight now, he said, was over how wide to make those exemptions. Lincoln, he said, is leaning toward making the exemptions very narrow and limited to "bona fide commercial interests" that are directly related to the company's business model. "That seems to be the direction she's moving," he said.

Banks have been pushing for a "balance sheet exemption" -- a massive loophole that would exempt any derivatives trading that was connected to the company's balance sheet, which would essentially cover any trading at all. Collura said that Lincoln's approach would not allow such exemptions.

Lincoln outlined her proposal in a letter to Sens. Maria Cantwell (D-Wash.), Dianne Feinstein (D-Calif.), Byron Dorgan (D-N.D.) and Olympia Snowe (R-Maine) that responded to concerns they had raised earlier.

Cantwell, an advocate of strong reform, was pleased. "Senator Lincoln has come out with the strongest proposal to date of any of the committee chairs working on financial regulatory reform," she said after receiving the letter. "As the daughter of a farmer, she knows the difference between farmers legitimately hedging and Wall Street speculators cooking up toxic assets. It looks to me as though Sen. Lincoln is proposing a real stare down of Wall Street."

Read the letter here.

Lincoln is framing her proposal as reaching further than anything the White House has proposed. "The financial regulatory reform legislation that I am poised to introduce this week is historic reform. I have been working closely with Ranking Member Chambliss, the Administration, and other Senate Democrats and Republicans to craft this legislation and my proposal is reflective of those conversations," said Lincoln in a statement. "It will include strong mandatory trading and clearing requirements as well as real-time price reporting that will bring 100% transparency and accountability to Wall Street. My bill will vigorously reform unregulated markets, close all loopholes, and protect jobs on Main Street. Proposals that I have seen from the Administration have not gone far enough to prevent bail outs of 'too big to fail institutions' and could contain loopholes. If we pass reform, it needs to be real reform. My proposal will go further than any other Congressional or Administration proposal to prevent future bailouts."

http://www.huffingtonpost.com/2010/04/14/democrats-hold-the-line-a_n_536997.html

Obviously this letter was sent before the breaking news about Goldman Sucks!


Unified GOP To Block Senate From Debating Wall Street Reform

Mitch McConnell has rounded up the necessary votes to block Democrats from bringing Wall Street reform to the Senate floor, a spokesman for the Senate Minority Leader said on Friday afternoon.

Senate Majority Leader Harry Reid (D-Nev.) said on Thursday he planned to bring the bill to the floor next week where it would be debated and amendments added. McConnell has now persuaded 41 Republicans to vote against debating reform.

'We simply cannot ask the American taxpayer to continue to subsidize this 'too big to fail' policy. We must ensure that Wall Street no longer believes or relies on Main Street to bail them out. Inaction is not an option," McConnell writes in a letter to Reid that was provided to HuffPost.

Democrats have been battering McConnell all week for his firm opposition to the Democratic reform effort.

Reid spokesman Jim Manley told HuffPost that Reid will be moving ahead regardless.

"Congratulations. I hope they feel good," said Manley. "They've got 41 signatures on a weak, watered-down letter that simply calls for more negotiations. If they are at all serious, they will simply let us go to the bill next week and let the amendment process begin."

Manley said the bill will be brought up for a vote on a motion to proceed to debate later this coming week.

Read the full letter:



http://www.huffingtonpost.com/2010/04/16/unified-gop-to-block-sena_n_540823.html

Oh you lying sack of shit!

Sorry for the curse words but Cornyn doesn't go ANYWHERE there isn't some advantage to him.

McConnell explains Wall Street meeting with Cornyn
Posted: April 18th, 2010 04:38 PM ET

From CNN Associate Producer Martina Stewart

Washington (CNN) – A day after President Obama sought to use a closed-door meeting between Wall Street leaders and two top Senate Republicans as political ammunition in the battle over financial regulatory reform, Senate Minority Leader Mitch McConnell tried to explain the meeting.

In a rare move, Obama used his weekly internet and radio address to single out McConnell and Sen. John Cornyn, who leads the GOP's effort to elect Republicans to the Senate in November.

The changes sought by Democrats "have not exactly been welcomed by the people who profit from the status quo – as well their allies in Washington," Obama said in his address. "This is probably why the special interests have spent a lot of time and money lobbying to kill or weaken the bill. Just the other day, in fact, the leader of the Senate Republicans and the chair of the Republican Senate campaign committee met with two dozen top Wall Street executives to talk about how to block progress on this issue.

Lo and behold, when he returned to Washington, the Senate Republican Leader came out against the common-sense reforms we've proposed."

Asked about the meeting on CNN's State of the Union Sunday , McConnell rejected any suggestion that the meeting was used to craft ways to block financial regularly reform. Ultimately, McConnell said Cornyn was there because he will be voting on the reform legislation.

"Did the meeting take place?," CNN Chief Political Correspondent and State of the Union anchor Candy Crowley asked McConnell. "What was the conversation?"

"Well, we certainly didn't talk about blocking the bill," the Kentucky Republican replied. "I don't know anybody who's in favor of blocking this bill."

McConnell added, "I thought [the president] wanted us to have a bipartisan bill. That's what I would like to have. We are in the process of gathering information from people all across the country, from Wall Street to Main Street to try to get advice about doing this right."

McConnell also said that he met recently with bankers in his home state who oppose the current version of the financial reform bill.

Pressed by Crowley about how Cornyn's involvement, at least created the appearance that Republicans were playing politics with the issue of reform, McConnell denied Obama's accusation.

"Well, look, we were talking about financial regulation, as everybody in the country is talking about it," the top Senate Republican said. "Most of the people in New York supported the president, the vast majority of them are on his side. They supported him during the election, they still support him. Is he saying we shouldn't sit down with his supporters and talk about a bill that he thinks we ought to pass and that I think we ought to pass? This is absurd, he..."

"Why was Sen. Cornyn there?," Crowley queried.

"Candy, [Obama] is the one who is trying to politicize this issue. We are the ones who are trying to get it right," he replied.

Crowley pressed McConnell again about Cornyn's attendance at the meeting. "But what did the Wall Street people tell you?"

"Well, they have concerns about the bill," the Senate minority leader explained, adding that he thought the Senate ought to "go back to the drawing board" and fix the legislation.

"Let me try one more time," Crowley volleyed. "Why was Sen. Cornyn in that meeting of all of the other senators you could have taken with you?"

"Sen. Cornyn is a United States senator from Texas," McConnell explained. "He is going to be voting on this issue like all the rest of us are. Simply because we are all involved in politics, as is the president, it doesn't mean that we can't discuss issues with people that we meet around the country who are deeply involved and concerned about what we are doing."

Later on State of the Union, Sen. Mark Warner, a Democrat from Virginia, called on McConnell and Senate Republicans to propose alternatives to the component of the bill they have been voicing objections to in the past week. All 41 Senate Republicans have said they oppose the legislation as it currently stands but the White House signaled late last week that it is open to changes to the bill.

http://politicalticker.blogs.cnn.com/2010/04/18/mcconnell-explains-wall-street-meeting-with-cornyn/?fbid=ZbiKm6XNnRF#more-100137

Reid to play chicken on Wall Street reform, daring GOP to filibuster
By Alexander Bolton - 04/20/10 11:31 AM ET

Senate Majority Leader Harry Reid (D-Nev.) has decided to play a game of political chicken with Senate Republicans, daring them to kill a Wall Street reform bill.

Reid said he plans to move ahead with immediate consideration of the financial regulatory reform bill, despite a GOP pledge to filibuster the measure.

“Remember, there are only 59 of us, so if a single Republican is not willing to join with us, there will be no Wall Street reform,” Reid said. “Republicans will have killed Wall Street reform. I am confident that will not happen.”

Sen. Susan Collins (R-Maine), a crucial swing vote, said Monday that she would support a Republican filibuster if Reid tried to advance a bill crafted by Senate Banking Committee Chairman Chris Dodd (D-Conn.).

But Democrats believe that even if Collins votes to block a bill, other centrist Republicans, such as Maine Sen. Olympia Snowe, may vote to allow debate.

A Democratic aide said Reid still hopes to bring the bill to the floor by the end of this week.

“It’s time to move forward with this bill,” said the aide. “Chairman Dodd has been negotiating with Republicans for months.”

Forty-one Republicans signed a letter to Reid urging him to support bipartisan negotiations on the Banking and Agriculture panels, which have jurisdiction over the legislation.

Reid argued that Dodd spent hours on Monday negotiating with Sen. Richard Shelby (Ala.), ranking Republican on the Banking Committee.

The Democratic leader has shown little inclination to allow these talks to stretch for another three or four weeks, a span Collins estimated would be needed to produce a bipartisan compromise.

Instead, Reid has shown a willingness to force Republicans to vote on and kill the legislation. If the bill derails, Democrats say they will make it a prominent issue in the midterm elections.

“Let's move forward in a bipartisan manner to get this bill done as quickly as possible, go to conference with the House, have the president sign a bill,” Reid said. “The sooner we do that, the more stable our economy will be.”

http://thehill.com/blogs/on-the-money/banking-financial-institutions/93283-reid-promises-game-of-chicken-with-gop-on-wall-street-reform