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."