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March 17, 2010 Wednesday 11:38 AM EST
SECTION: NEWS & COMMENTARY; Economy and Politics
LENGTH: 575 words
HEADLINE: A year more of bank-reform debate likely: Boehner
BYLINE: Ronald D. Orol, MarketWatch mailto:firstname.lastname@example.org.
Ronald D. Orol is a MarketWatch reporter, based in Washington.
WASHINGTON (MarketWatch) — If the Senate can produce sweeping bank-reform legislation, expect House and Senate lawmakers to continue squabbling at least a year more or longer, said House Republican Leader John Boehner on Wednesday.
“If the Senate is able to produce a bill, I think it’s just as likely that we’ll be talking about the same issue a year from now as we are right now,” Boehner, R-Ohio, told an enthusiastic crowd of bankers at the American Bankers Association government relations summit.
Boehner argued that a Senate bill that is approved will be “way, way, way” to the right of bank-reform legislation approved by the House in December, leaving the two chambers far apart from each other on key pieces of the bill.
Senate Banking Committee Chairman Christopher Dodd, D-Conn., on Monday introduced a revised bank-reform bill without Republican support. He plans to have the panel vote on the bill next week and hopes to have the bill considered by the Senate in April.
“I don’t know how they ever come to an agreement on some kind of a bill they can bring back to both houses and pass,” Boehner said.
Boehner’s comments come as bankers prepare to descend upon Capitol Hill to press for changes to the bank-reform legislation, which they wouldn’t support in its present form. Boehner said he urged bankers not to be shy when meeting with the lawmaker staff members and to send a message that new regulations and taxes translates to into banks having less available for lending.
“Don’t let those little punk staffers take advantage of you and stand up for yourselves,” Boehner said. “All of us are hearing from our friends and constituents on lack of credit, you can’t get a loan, the more your government takes and taxes, the more regulations you have to comply with the more cost you have there and less amount you are going to have available to loan to customers.”
Before Boehner, ABA President Edward Yingling told bankers that the longer that the Senate lawmakers can’t come to an agreement on the bank-reform bill, the more leverage Sen. Richard Shelby, R-Ala., the banking committee’s ranking member, has to prompt concessions.
“Every day that passes gives more leverage to Shelby,” Yingling told bankers.
The banking committee is concerned about the bill’s intention to create an independent consumer financial protection division, with a presidentially appointed chairperson, within the Federal Reserve. They argue that bank regulators should continue to be responsible for protecting consumers as well as making sure financial institutions have sufficient capital. The proposed consumer unit would write rules for mortgages and credit card products.
The group is also concerned about additional fees that would be collected from large banks that would be allocated to a fund that would be used to dismantle a failed mega-bank so that its collapse wouldn’t unsettle the markets. The House bill seeks to create a $150 billion fund while the Senate is seeking to create only a $50 billion fund.
The ABA is also opposed to a provision in the Senate bill that would have state-chartered banks that also register with the Fed as their federal regulator, transfer over to the Federal Deposit Insurance Corp. The Fed would continue to oversee and conduct onsite exams for 35 banks with $50 billion or more in assets.
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