House and Senate lawmakers are set to meet in mid-June to hash out differences between their regulatory reform bills. Democratic leaders are hoping to finalize a bill before the July 4 recess, but have to work out several thorny issues, including preemption language, how to implement the Volcker Rule, and whether to include controversial provisions that would regulate interchange fees and ban the use of trust-preferred securities from Tier 1 capital.
A Guide to ReconciliationKey differences between House and Senate regulatory reform bills | |||
|---|---|---|---|
| Issue | House | Senate | |
| FDIC Board | Gives OTS seat to the Fed | Gives OTS seat to the consumer protection agency | |
| Consumer Protection | Creates an independent agency | Creates an independent bureau housed at the Fed | |
| Preemption | Attempts to restore Barnett standard, adds additional hurdles | Explicitly restores Barnett standard, no extra hurdles | |
| State AG Power | Could enforce federal law against national banks | Could enforce only new consumer agency rules against national banks | |
| Trust-Preferreds | Unaddressed | Bans use of trust-preferred securities as Tier 1 capital | |
| Derivatives | Regulates swaps but allows banks to still sell them | Regulates swaps and forces banks to spin off swaps desks | |
| Volcker Rule | Would allow regulators to break up big banks | Tells regulators to ban proprietary trading, limit investment | |
| Resolution Fund | Would create $200 billion fund for large failures | Lets the FDIC borrow from Treasury to handle a failure | |
| Thrifts | Eliminates OTS, but keeps thrift charter | Eliminates OTS and thrift charter | |
| Interchange | Unaddressed | Gives Fed power over interchange rates on debit cards | |
