Amendments Galore

This week is another tough week for the Financial Reform Bill. PBS NewsHour reports that over the past two days, more than 200 amendments have been filed for the bill. Some of the major amendments that have passed, as reported by PBS, are: Regional Feds Retain Oversight, Small Business Exempt from Consumer Regulation, Auditing the Fed, and Banning ‘Liar-Loans’ and Mortgage Kickbacks.

Here is a quick explanation of each amendment:

Regional Feds Retain Oversight – This allows smaller regional banks to determine what agency will be regulating them; the FDIC or The Fed.

Small Business Exempt from Consumer Regulation – This allows small business to be exempt from oversight if they meet the “three-prong-test.” The three prongs consist of; (1) Selling non-financial products (anything not linked to finances), (2) not securing consumer debt and (3) must be a NAICS approved small business.

Auditing the Fed – The senate is now allowed to perform a one-time audit on the Financial Reserve.

Banning ‘Liar-Loans’ and Mortgage Kickbacks – Now lenders are forced to make sure the person or company asking for the loan has the income and ability to pay back the loan.

“The Economist” reported that the bill appears to be getting more and more radical as amendments are added. Rules are getting more stringent for banks, credit card, and lending companies; it is getting to the point where some of these companies may not be able to afford staying in business. Regulations, such as one that would require separate swaps-units in a single company, are supposedly not supported by the administration as well as regulation agencies.

Democrats are hoping to have the bill completely passed by next week, but they have met some heavy opposition. Republicans are not, in any way, satisfied with the way the bill was written and are not comfortable passing it until they have made changes to make the bill more acceptable. However, every time the Republicans come up with a viable change, Democrats band together and shut it down. The Talking Points Memo believes that this may be headed in the same direction as the Financial Reform Bill from April, and that is a filibuster. This time Republicans have more to filibuster with by saying that there needs to be more debate.

Party leaders have agreed on one thing, this bill will eventually pass. There are two ways it could go, the first is if Republicans can’t hang on long enough and a more liberal bill is passed and the other is if Republicans hold strong, forcing the Democrats to allow them some changes. There is no telling how it will turn out, and when the bill will actually pass. Many people are speculating that it will have to wait until after next week’s primary elections, and perhaps the primaries will have an effect on how the bill turns out.