Financial-reform backers pick up key vote in Senate

The overhaul of the nation’s financial industry gained momentum in the Senate last night when a senator who opposed the original bill said she will support the final version that emerged from negotiations between the House and Senate.

Sen. Maria Cantwell, D-Wash., was one of two Democrats who voted against the original Senate version of the measure when it passed 59-39 in late May. The final bill, the product of two weeks of talks in June to merge the House and Senate versions, was approved by the House on Wednesday.
Now it must pass the Senate before being sent on to President Obama to be signed into law. With the death this week of Sen. Robert Byrd, D-W.Va., the Senate Democratic caucus now numbers 58. That puts the Dems two senators short of the number needed to overcome a Republican filibuster.
Not surprisingly, Democratic leaders in the upper house have been working this week to secure the backing of all four GOP members who supported the original Senate bill.
They’ve got a little time to win over the Republicans. The Senate is not expected to vote on the bill, now called the Dodd-Frank Act, until the week of July 12.

With Ms. Cantwell on board, Democrats probably need to get the support of three of the four Republicans — Sens. Susan Collins and Olympia Snowe (Me.), Scott Brown (Mass.) and Charles Grassley (Iowa). Sen. Russell Feingold, D-Wis., also voted against the original Senate version and remains opposed. Ms. Collins indicated this week that she will vote for the bill.
Ms. Cantwell said she supports the final bill because of its tough approach to regulating derivatives.
“I will vote in support of the conference report because it makes great strides toward our ultimate goal: bringing all standard derivatives onto exchanges and clearinghouses, with aggregate position limits and strong anti-manipulation tools,” she said in a statement. “Since even before the financial crisis of fall 2008, I have been fighting to bring the $600 trillion derivatives market out of the dark, unregulated betting hall where it has existed and into the bright light of transparency and regulation.”
To convince other undecided Republican senators to back the bill, the House-Senate conference was briefly reopened this week to remove a provision that would impose a $19 billion fee on large banks to pay for the legislation.
Lawmakers replaced the tax with funds generated by shutting down the Troubled Asset Relief Program. That move is expected to raise about $11 billion. The rest of the bill would be financed by increasing the Federal Deposit Insurance Corp.’s assessment on insured deposits in financial institutions with more than $10 billion in assets. The FDIC would have until 2020 to ratchet up the charge from its current 1.15% level to 1.35%.
The change has not yet persuaded Mr. Brown to back the final bill. Mr. Brown supported the original Senate version.
“I appreciate the conference committee revisiting the Wall Street reform bill and removing the $19 billion tax,” he said in a June 30 statement. “Over the July recess, I will continue to review this important bill. I remain committed to putting in place safeguards to prevent another financial meltdown, ensure that consumers are protected and that this bill is paid for without new taxes.”