Dodd-Frank and the CR (Nov. 13)

Mike & Co. —

Positions are already being staked out in anticipation of a compromise on financial regulatory policy next month as part of a long-term extension of the FY 2016 Continuing Resolution.  How deployments look right now is sketched out below.  

Great weekends, everyone…

Dana

———-

The terms of engagement for year-end  changes to Dodd-Frank are being gamed out in various quarters around the Hill, with the CR’s December 11 expiration now less than a month away.  Last year, the spending bill came at a price — and that was before the GOP took the Senate.

For the first time since its passage in 2010, a significant amendment to Dodd-Frank (DFA) was enacted last year when the Section 716 swaps “push-out” provision was repealed.  It was accomplished in an 11th-hour deal to get the must-pass “Cromnibus” over the finish line at year end.  The deal enraged Sen. Warren and 21 of 54 Democrats voted against the bill even though its approval came less than three hours before a midnight deadline that threatened a federal shutdown.

And gone was the requirement that some derivatives trades made by bank holding companies be conducted outside the units that hold deposits and enjoy the benefits of deposit insurance.

Within weeks, Warren torpedoed an administration nomination to a key Treasury post overseeing Dodd-Frank.  Though the nominee’s views were not dissimilar from Warren’s, he had spent the bulk of his years at Lazard, a blue chip Wall Street firm (and, possibly worse, French).  No one has been nominated to the post since.

House Financial Services has reported bills weakening, limiting, underfunding, or repealing various parts of DFA frequently this session, passing ten more similar measures in a marathon mark-up last week.  But none of these has a chance of being picked up in the Senate, let alone of enactment on a standalone basis while Obama is President.

In the Senate, the most comprehensive set of legislative limits to DFA yet to clear a major Committee, written by Senate Banking Chair Richard Shelby, cleared the panel on a 12-10 party-line vote in May. The bill has eight major titles and provisions ranging from increasing the SIFI designation threshold to changing the method of selecting the NY Fed President to requiring exams for community banks every 18 months instead of annually.  Have a look:  http://www.banking.senate.gov/public/_cache/files/73d86467-03c5-4e11-9aa2-e205ec1cf811/3895FC44565256E3151D809B2A429B8A.section-by-section-summary.pdf.

A party line 12-10 vote in committee isn’t enough to get such a sweeping bill to the floor and Shelby knows it.  Reformers and industry have both taken a close interest in the congressional struggle to refund the government with eyes on December 11.  The appropriations rider strategy has worked before.  Shelby has now publicly stated that the appropriations process, with the implied threat of a government shutdown, offers the “best shot” of getting it enacted.  Riders under discussion cover a range of issues including the Fiduciary Rule, the legal basis for nonprofit groups to challenge discriminatory housing and mortgage-lending practices, and CFPB governance.

Seeking to put a tag on the price Democrats paid in last year’s CR sweepstakes, Sen. Warren and Rep. Elijah Cummings of Maryland, ranking Democrat on the House Overnight and Government Reform Committee published a letter this week from FDIC estimating that the 15 banks currently registered as swap dealers along with their subsidiaries hold up to $9.7 trillion of the types of derivatives that would have been pushed out under Section 716 (totaling 4.4 percent of all outstanding derivatives contract holdings at federally insured banks, comprised of $6.1 trillion in credit derivatives, $1 trillion in commodity derivatives and $2.6 trillion in equities derivatives, per the FDIC letter).

But in the quieter corners of the Capitol, with GOP majorities in both ends, a group of moderate Democrats is negotiating with Republicans, risking the wrath of Warren and maybe the Democratic base.  The group includes Sens. Donnelly, and Heitkamp, coordinated by Tester, occasionally Warner.  Donnelly said work is happening “every day.”  Sherrod Brown:  “everybody’s talking to everybody.”

Shelby is trying to find the price that the CR can bear, in terms of heft and scope of viable changes to Dodd-Frank.

Sen. Moran:  “That’s been the discussion really from the beginning: How expansive can this be, and beyond community banks what more can be accomplished?  The parameters have been narrowed, but, still, finding that sweet spot is in discussion.”

Treasury Secretary Lew on Tuesday:  “We are open to discussions about things that are truly technical but we are very much opposed to anything that would undermine any of the core architecture of Dodd-Frank.  The line between the two is sometimes hard to define.”

If it is only regulatory relief for community banks, it’s like a win-win, most Democrats would agree.  If it’s a tenfold increase in the SIFI trigger, harder to say  If it’s closer to the scope and scale of Shelby’s bill, a stormy December is in the forecast.

30 thoughts on “Dodd-Frank and the CR (Nov. 13)”

  1. Nice post. I was checking continuously this weblog and I am impressed!
    Very helpful information particularly the last
    part 🙂 I deal with such information much. I was looking for this certain information for a long time.
    Thanks and best of luck. 0mniartist asmr

  2. Sweet blog! I found it while surfing around on Yahoo News.
    Do you have any tips on how to get listed in Yahoo News?
    I’ve been trying for a while but I never seem to
    get there! Appreciate it asmr 0mniartist

  3. Link exchange is nothing else however it is only placing
    the other person’s blog link on your page at proper place and other
    person will also do similar for you. 0mniartist asmr

  4. Hey there, You have done an incredible job. I’ll certainly digg it
    and personally recommend to my friends. I am sure they’ll
    be benefited from this website.

  5. I like the valuable info you provide in your articles.
    I’ll bookmark your weblog and check again here regularly.
    I’m quite sure I’ll learn a lot of new stuff right here!
    Best of luck for the next!

  6. Hello there! This is my 1st comment here so
    I just wanted to give a quick shout out and tell
    you I genuinely enjoy reading through your articles. Can you
    recommend any other blogs/websites/forums that deal with the same topics?
    Thank you!

  7. Hello, Neat post. There is an issue with your web site in internet explorer, may check this?
    IE nonetheless is the marketplace chief and a big component to other folks will leave out
    your fantastic writing because of this problem.

  8. Oh my goodness! Incredible article dude! Thanks, However I am encountering difficulties with your RSS.

    I don’t understand why I am unable to subscribe to it. Is there anybody else getting identical RSS
    problems? Anyone that knows the solution can you kindly respond?
    Thanx!!

  9. You actually make it seem really easy together with your presentation however I to find this matter
    to be actually one thing which I think I would never understand.
    It sort of feels too complicated and extremely extensive
    for me. I’m having a look forward for your next post, I’ll attempt to get the dangle of it!

  10. I am not sure where you’re getting your info, but
    good topic. I needs to spend some time learning more or understanding more.
    Thanks for great information I was looking for this information for my mission.

  11. scoliosis
    Hello, i think that i saw you visited my weblog thus
    i came to “return the favor”.I am trying to find things to enhance my web site!I
    suppose its ok to use some of your ideas!! scoliosis

  12. scoliosis
    Hi there! I could have sworn I’ve visited this site before but after going through many of
    the articles I realized it’s new to me. Anyways,
    I’m definitely happy I discovered it and I’ll be bookmarking it
    and checking back often! scoliosis

  13. scoliosis
    Hey there! Someone in my Myspace group shared this website with us so I came
    to check it out. I’m definitely enjoying the information. I’m
    book-marking and will be tweeting this to my followers!
    Exceptional blog and outstanding design and style.
    scoliosis

  14. Hello there! Quick question that’s completely off topic.
    Do you know how to make your site mobile friendly? My weblog looks weird when viewing from my iphone 4.

    I’m trying to find a template or plugin that might be able to correct this
    issue. If you have any suggestions, please share.

    Thank you!

  15. Nice post. I was checking continuously this weblog and I am inspired!

    Extremely helpful info specially the closing phase 🙂 I deal with such information a lot.

    I used to be looking for this particular info for a long time.
    Thank you and best of luck.

  16. I have to thank you for the efforts you have
    put in penning this website. I am hoping to check
    out the same high-grade blog posts by you in the future as well.
    In fact, your creative writing abilities has encouraged me to get
    my own, personal website now 😉

  17. My brother suggested I might like this website. He was totally right.
    This post truly made my day. You can not imagine simply how much time I had
    spent for this information! Thanks!

  18. Hey there! I know this is kinda off topic but I
    was wondering if you knew where I could find a captcha plugin for
    my comment form? I’m using the same blog platform as yours and I’m having trouble finding one?
    Thanks a lot!

  19. Hey would you mind letting me know which hosting company you’re using?
    I’ve loaded your blog in 3 completely different browsers and I must say this blog loads a
    lot quicker then most. Can you suggest a good internet hosting provider at a reasonable price?
    Many thanks, I appreciate it!

  20. Hmm it seems like your blog ate my first comment
    (it was super long) so I guess I’ll just sum it up what I had written and say, I’m thoroughly enjoying your blog.
    I too am an aspiring blog blogger but I’m
    still new to everything. Do you have any tips and hints for first-time blog writers?

    I’d really appreciate it.

Leave a Comment

Your email address will not be published. Required fields are marked *