I find it really depressing and exhausting to follow this bill through to the end. But I also realized that the depressing and exhausting part of it is a political force, that can easily keep from paying attention for when the deals get cut behind closed doors. So kudos to those who are still watching this hour by hour. Here’s some stuff to keep an eye on:
– After an interchange swipe fee compromise was reached yesterday, Chris Bowers finds, in House conferees pass swipe fee compromise; Schumer goes to GOP to seek further exemptions, that Chuck Schumer is reaching out, along with credit card lobbyists, to get Republicans to gut the compromise deal. Wow. This will come to a head today.
– Banking and payment analyst Bryan Derman gets real about the Durbin Amendment. Great article, responding to the talking points about interchange being driven by lobbyists. My favorite quotes, responding to a lobbyist line: “If you are merchant reading this, you must giddy to learn that you have so much pricing power and that the laws of economics no longer apply to you.” Heh. The Audit also has an excellent piece on interchange.
– David Dayen reports that auto dealers are exempted from the CFPB.
Reup: I talked about the exemption to Planet Money here, and Planet Money turned around and asked Rep. John Campbell (R-Calif.) why he introduced this into the debate when he owns property where car dealers are located. That link also talks about Raj Date’s work on the matter.
The vote that got an auto dealer exemption into the House Bill features, with video, at the beginning of Ryan Grim and Arthur Delaney’s The Cash Committee, what I think is one of the best pieces on the financial reform bill in the House (and a great peek into how Congress works around election funding).
– I can’t find this for certain, but watch the relationship between the CFPB and smaller banks, banks under $10 billion. Last October, there was a debate about having the Consumer Financial Protection Agency not have any enforcement or examination of banks under $10 billion in size. The compromise that was fought for by progressives, the Miller-Moore Amendment (Felix Salmon talked about this and so did this October 2009 New York Times article. The deal that was struck was as follows:
Under the Miller-Moore amendment, the new agency would have the authority to write rules for all banks and other lenders, including lenders that have never faced significant regulation. But the banks with assets of less than $10 billion and credit unions smaller than $1.5 billion would not face regular exams by the agency.
Instead, the consumer regulations would continue to be enforced in most cases by the agencies that monitor the financial condition of the banks. Mr. Frank said that under the amendment, the new agency would still have the authority to investigate complaints raised at any bank.
So in the House, the CFPA would still have rule-writing authority, but the normal prudential regulator would carry out regular enforcement, though the CFPA could investigate specific complaints. The CFPA would have backstop authority, and could take enforcement actions if the prudential regulator didn’t take any actions within 120 days of a complaint from the CFPA. Subject to appeal, the the commission can remove the prudential regulator and allow the CFPA to step in. Not perfect, but given that the CFPA barely made it out of the House, this seemed like a fair compromise.
It appears that this compromise might be at risk. Here is the House offer on consumer protection. It would be a shame if it didn’t make the final bill, will find out shortly.
– Ryan Grim reports Insurance Industry Poised To Tear Loophole In Wall Street Reform, which might as well be called the AIG amendment.
– Luis Guiterrez at Huffington Post, talking about prefunding a resolution fund. He gave it a serious try, but unfortunately it wasn’t happening. I do think this one thing would have made a major difference, perhaps the biggest difference of something that was still in play between the bills.
– I’m really worried about a complete disaster on derivatives in the next few days. If the House language became the new base, that would be a nightmare scenario.