GOP Drops Opposition Over Financial Rules Debate
MICHELE NORRIS, host:
From NPR News, this is ALL THINGS CONSIDERED. I'm Michele Norris.
MELISSA BLOCK, host:
And I'm Melissa Block.
It looks like the financial regulatory bill is headed to the Senate floor for debate. With the Democrats threatening to keep Republicans on the Senate floor all night, Republican leaders have relented. They're no longer insisting that all 41 Republicans stick together and block the bill. At the same time, Democrats agreed to consider removing from the bill a controversial bank fund to wind down failing institutions.
NPR's Audie Cornish joins us from Capitol Hill. And, Audie, there is a lot of movement today. First, the Republicans blocked this bill for the third time, and then what happened to loosen the logjam?
AUDIE CORNISH: Well, Democrats, actually, threatened to hold an all-nighter. I mean, they basically said, we're going to stay in session all night, so that if Republicans really want to block this bill, they'll have to come to the floor and show the American people that they're trying to stop it.
And then shortly, just about an hour ago, we heard from the GOP lead negotiator on the bill - thats Richard Shelby of Alabama. And he said, hey, bipartisan talks have reached an impasse. We haven't reached an agreement on some key issues, and therefore folks on the Republican side who want to vote to go forward, you can be my guest.
Shelby also said that he'd gotten some assurances from the banking committee chair, Chris Dodd, that there would be changes to the bill regarding dealing with too-big-to-fails, specifically the idea of bailouts for financial firms.
BLOCK: Now, we mentioned the controversial bank fund, $50 billion, paid in by the banks that would wind down failing institutions. That now is gone? What's going to happen to that?
CORNISH: It's not clear exactly if that has been dropped. This was a $50 billion fund that Democrats said would cover the costs as simply liquidating a firm thats already on its way out, and that it would be paid for by banks. But the GOP has always argued that there are loopholes in this provision that could still lead to taxpayers spending money on financial firms.
And what we've seen in the last few days, as Democrats have said, ah, this isn't so central to the bill. We've had amendments proposed, ideas that, perhaps, there should be a change to the bill that would say, no more taxpayer funded bailouts of any kind forever and ever. And it's not clear which of these ideas has sort of won over Republicans to letting to make it go forward.
BLOCK: Right. And we heard from Secretary Tim Geithner the other day that the administration wasn't wedded to this fund either, at least before any of the institutions(ph) failed. What are the other points of disagreement here, Audie, between Republicans and Democrats?
CORNISH: Well, the two key issues have been, number one, the Consumer Protection Bureau. This was supposed to be a division in the Federal Reserve that would watch over consumer lending like home loans and mortgages. But Republicans lately have really been going after this in the last two days, saying that this would ensnare everyone from dentists to auto dealers or any other retailers that - in which you pay them in installments.
We saw this kind of - this conversation back when the House passed their bill last fall, so this criticism has returned. The GOP also wants banking regulators to have strong veto power over that consumer bureau. And lastly, derivatives, those complex contracts that companies use to hedge their risks, figuring out what language to use and how far reaching to regulate those derivatives, thats still a main sticking point.
BLOCK: And, Audie, what happens now?
CORNISH: Right now, the GOP caucus is meeting to, number one, explain what concessions, if any, they've gotten, and for the leadership to essentially clear the way to a vote. There have been Republicans, like George Voinovich of Ohio and Susan Collins of Maine, who said they like to consider this on the floor, and now it seems like they're going to have the go-ahead to do so.
BLOCK: Okay. NPR's Audie Cornish, reporting from Capitol Hill. Audie, thanks so much.
CORNISH: Thank you.
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