Wall Street reform amendment update, May 13th

by: Chris Bowers

Thu May 13, 2010 at 12:30

Eight amendments on docket right now
There are currently eight amendments scheduled for today.  They are listed in the extended entry.

Franken amendment on credit rating agencies up today
Among the eight amendments today is Al Franken's amendment to end conflicts of interest in credit rating agencies.  Here is a quick summary of why it is a good thing, and needs to pass:

Making the bill stronger: Sen. Franken (D-Minn.) creates a Credit Rating Assignment Board which would assign the credit rating agency that does each initial rating in order to reduce the inherent conflict of interest in the current business model - where the person who hopes to sell the rated product pays the rater.  This amendment stops securities issuers from shopping around among credit rating agencies for the best rating, leading raters to inflate their grades as they scrap for market share.

 
Why it matters: Credit Rating Agencies got paid to slap AAA ratings on packages of dangerous investments they did not even try to understand or evaluate. Their triple A ratings created huge markets for these investments, and spread them through every corner of the market. When the House of Cards built on their false promises collapsed, millions of Americans lost their savings.

On the floor just now, Dodd said he thought it was a good idea, but was still concerned and uneasy.  Said bill already does a lot to reform rating agencies.  Without his support, the amendment probably will not pass.

Carper amendment not currently scheduled
Tom Carper's amendment to gut the ability of state Attorneys General to regulate financial institutions, which yesterday I called the most dangerous amendment in the whole process,  is not among the amendments currently scheduled.  However, the White House is taking the amendment seriously enough that they held a press call today with a couple state Attorneys General to argue against the amendment.  On the call, the White House did not list the specific Senators which are in most need of targeting to defeat the amendment.

Amendments don't have to pass to end up in final bill
Keep in mind that the final manager's amendment which will face the cloture vote can change language in the bill that was not passed by amendment on the floor.  So, even if the Carper amendment does not come up for a vote, it is possible that it will end up in the final bill anyway.

Primaries delay final passage
The final cloture vote on Wall Street reform had been expected for Monday.  However, with both Blanche Lincoln and Arlen Specter in heated primaries that take place on Tuesday, don't expect the cloture vote until at least Wednesday.  If their Lincoln and Specter's votes are needed--and it is likely their votes are needed-the earliest the vote should be expected in Wednesday afternoon.

Brian Beutler and David Dayen have more on this.

Democrats meeting a 1pm to determine process going forward
During a meeting today from 1-2pm, Senate Democrats will make decisions on what other amendments will be offered, if there will be any debate tomorrow, when the final cloture vote will take place, and other procedural matters.  I will try to get reports on what is decided at that meeting shortly after it happens.

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Debate is live on CSSPAN-2.  List of amendments up for a vote today can be found in the extended entry.

• ollins amendment to mandate minimum leverage and risk-based capital requirements for insured depository institutions, depository institution holding companies, and nonbank financial companies that the Council identifies for Board of Governors supervision and as subject to prudential standards. (#3879)

• Brownback amendment to provide for an exclusion from the authority of the Bureau of Consumer Financial Protection for certain automobile manufacturers, and for other purposes. (#3789, as modified)

• Snowe-Pryor amendment to ensure small business fairness and regulatory transparency. (#3883)

• Specter amendment to amend section 20 of the Securities and Exchange Act of 1934 to allow for a private civil action against a person that provides substantial assistance in violation of such Act (#3776, as modified)

• Leahy amendment to restore the application of the Federal antitrust laws to the business of health insurance to protect competition and consumers. (#3823)

• Sessions amendment to provide an orderly and transparent bankruptcy process for non-bank financial institutions and prohibit bailout authority. (#3832)

• Durbin amendment to ensure that the fees that small businesses and other entities are charged for accepting debit cards are reasonable and proportional to the costs incurred, and to limit payment card networks from imposing anti-competitive restrictions on small businesses and other entities that accept payment cards. (#3989)

• Franken amendment to instruct the Securities and Exchange Commission to establish a self-regulatory organization to assign credit rating agencies to provide initial credit ratings. (#3991)