WASHINGTON — Roughly 15 months after the global financial system teetered on the brink of a cataclysmic implosion, the House of Representatives on Thursday began debating the most sweeping rewrite of financial regulation since the Great Depression.
The House began considering 36 amendments, after House leaders whittled down the 200-plus offered for consideration. That's more amendments than were offered on the health care legislation that moved through the House earlier this year, and it speaks to the contentious nature of financial revisions.
Just earlier this week, the House vote was uncertain as moderate Democrats threatened to withhold their support unless they got the chance to offer pro-business amendments. The Treasury Department and House Financial Services Committee Chairman Barney Frank, D-Mass., agreed to give them more room to offer amendments.
Frank's own "manager's amendment," reserved for the person who's shepherding the legislation through the voting process, included 51 provisions that incorporated amendments that had been among the more than 200 offered for consideration.
Voting on the 36 amendments is to conclude Friday, followed by an expected vote on the broad Wall Street Reform and Consumer Protection Act of 2009 as amended.
Frank's legislation stitches together a number of regulatory bills that moved this year through the House Financial Services Committee and the House Agriculture Committee.
These bills would:
_ Provide first-ever regulation for exotic financial instruments such as the insurance-like credit-default swaps.
_ Abolish the Office of Thrift Supervision.
_ Create a Financial Services Oversight Council to police the financial system.
_ Create a Consumer Financial Protection Agency to regulate consumer credit products such as mortgages, payday loans and credit cards.
Addressing one of the key failures in the recent financial crisis, the act also would create a so-called Resolution Authority, a legal way of breaking apart failing institutions that are so large that their collapse threatens the broader financial system.
Many proposed amendments, later filtered out, amounted to political theater.
Rep. John Culberson, R-Texas, sought to use the revamp bill to prohibit the Obama administration from transferring to the United States any prisoner at the U.S. military prison in Guantanamo Bay, Cuba.
New York Republican Rep. Christopher Lee sought to limit any financial disclosures to consumers to those presented in the English language.
Ohio Democratic Rep. Dennis Kucinich sought to impose a 70 percent tax on corporate profits registered by financial firms that have yet to repay their taxpayer bailout money.
The big test for Frank and the Obama administration will come on the 34th amendment to be debated.
Conservative Democrats such as Rep. Heath Shuler of North Carolina, Rep. Walt Minnick of Idaho and Rep. Travis Childers of Mississippi teamed up with moderate Republicans such as Rep. Michael Castle of Delaware and Rep. Aaron Schock of Illinois to offer an alternative to the Consumer Financial Protection Agency.
Financial giants such as Bank of America and the U.S. Chamber of Commerce, a lobbying heavyweight, have tried to kill the consumer panel. To that end, the bipartisan group of moderates is offering instead a Consumer Financial Protection Council.
It would be made up of 12 members, including most federal bank regulators, and would do much of what the Consumer Financial Protection Agency would do but it wouldn't create a standalone agency with new regulatory powers.
The final amendment belongs to Republicans, who'll offer an alternative bill that would establish a new chapter in the bankruptcy code instead of the so-called Resolution Authority, and more generally would weaken much of Frank's broad attempt to regulate Wall Street.
Other areas of intrigue include an amendment by Rep. John Conyers, D-Mich., that would allow bankruptcy judges to adjust the terms of distressed mortgages to prevent banks from foreclosing on borrowers.
Another fight will be over proposed new rules for the exotic financial instruments called derivatives. Big Wall Street banks have made billions in profits from these instruments, and several Democratic amendments seek to toughen the first-ever regulation of them and reduce the exceptions that were carved out from the legislation as it moved through committees.
On derivatives, bank lobbying has been matched step for step by consumer advocates.
"For the first time in my memory, there's a level playing field as far as lobbying is concerned," said Michael Greenberger, a former regulator and University of Maryland law professor who's part of the coalition Americans for Financial Reform. "The people who want meaningful reform and the people who want to weaken the bill are engaged in a fair fight, so to speak, and that's a big change."
The Senate Banking Committee began work this month on its own version of regulatory reform.
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Amendments accepted for debate
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