Senate Majority Leader Harry Reid, D-Nev., has filed a cloture motion on the financial regulatory reform bill as he pushes for the debate to end this week, but with hundreds of amendments still waiting to be decided, he may not get his wish.
The Senate has voted on a number of major provisions and amendments in recent days, including one that maintains the Federal Trade Commissions authority to protect consumers despite the creation of a new Consumer Financial Protection Bureau at the Federal Reserve. Another provision that gained approval would help the U.S. avoid bailing out foreign governments, an ironic provision given the possibility that the U.S. Treasury itself may one day need a bailout.
Speaking of bailouts, the Senate finally agreed on language to prevent the bailout of financial institutions by taxpayers, although too big to fail banks would not be broken up in the version of the bill likely to survive the Senate.
Another approved provision would limit the interchange fees that banks could charge merchants when consumers swipe their debit cards. The Senate voted against an amendment that would have phased out government support of housing lenders Fannie Mae and Freddie Mac in two years, but did vote in favor of a compromise measure: conducting a study of how to withdraw government support of the mortgage finance giants. When in doubt, Congress will invariably vote to conduct a study.
The Senate also voted Tuesday to pre-empt states from writing new laws to protect consumers from dubious financial products, but they would still be allowed to enforce federal consumer protection laws. Senate Republicans tried to block a provision that would have enacted the so-called "Volcker rule" to prevent banks from engaging in proprietary trading, but Democrats are still keeping the provision in play.
However, theres still a long list of amendments that were awaiting a vote as of Tuesday, including the question of whether to exempt automobile dealers from regulation by the Consumer Financial Protection Bureau was still undecided, as was an amendment to restore the old Glass-Steagall boundaries between commercial and investment banking. Derivatives-trading provisions have also not been entirely decided yet, including an amendment to force banks insured by the FDIC to spin off their derivatives-trading activities.
Reid has said that the Senate can vote for cloture and still continue its work on many of these amendments, and some provisions will no doubt still be under debate if and when the bill gets passed in the Senate. Thats because the bill would then re-emerge in a House and Senate conference committee that would try to reconcile the two chambers versions of the complex legislation.
However, it seems unlikely at this point that the Senate will vote to cut off debate, especially with so many important matters still left undecided. On the other hand, the Senate still needs to pursue its work on other important fronts, including job creation measures, extending benefits for the unemployed, and grilling Supreme Court nominee Elana Kagan about how she would rule in all kinds of hypothetical cases.
