Groups of US Senators and Representatives are working on a final joint version of the financial reform bills they passed earlier this year, under the gavel of liberal Rep. Barney Frank, D-Mass., who's agreed to televise proceedings so members can't water down rules away from public scruitiny. They want to get the job done before July 4 so the President can sign and everyone can go home to start campaigning.

FBR Capital Markets analyst (and former Federal Reserve Bank of Philadelphia bank examiner) Paul J. Miller Jr. summarized the job in a report to clients today. Some high points:

Consumer protection. Both bills set up a new consumer financial protection agency, the boss named by the President, with an independent budget. The Senate would put the agency under the Federal Reserve; the House agency would be independent, as Obama wants. "We believe that it is likely to be housed in the Federal Reserve."

Systemic risk. Both bills would have regulatory councils, chaired by the Treasury Secretary, that could break up banks that are too big to fail. The councils are a little different; whichever passes, this will be "one of the most impactful provisions of the legislation."

The Volcker rule. The Senate would ban banks from betting on securities or sponsoring hedge funds and private equity funds, which former Fed chairman Paul Volcker says creates conflicts of interest. The House has no such ban. "We expect some form of the Volcker Rule will be in the final bill," given the "considerable pressure from liberals." Bad news for Citigroup, Bank of America, Morgan Stanley, Goldman Sachs.

Derivatives. The Senate would force banks to trade derivative securities on registered exchanges and more or less force banks to spin off their derivatives and swaps trading operations. It would also hold banks to a high standard when they sell stuff to innocent states, towns, and pension funds.  "The House version is not as strong," writes Miller. "The key battle" would preserve banks' swaps desks. He calls this one too close to call.

States' rights. The Senate would allow states to pass "consumer protection laws that are more stringent than the federal standard." The House would allow state attorneys general to go further. Miller thinks banks will be able to roll this back to the Senate level.

Debit card fees
. 8 of the 12 Senators on the joint committee backed rewriting Visa and MasterCard rules. They would let merchants offer cash discounts and card-use limits. It would be"extremely difficult," Miller says, to water this down.