Lawmakers from both parties are apprehensive about the financial regulatory reform plan being pushed by President Obama as a cure for meltdowns like the one that sent markets plunging last year.
Obama told a Wall Street audience on Monday that he was “confident” Congress would pass a series of financial regulatory reforms that he proposed more than three months ago. But many of the president’s ideas are struggling to become legislation that can pass either the House or Senate. And neither chamber has introduced bills that fully incorporate the Obama proposals.
“From what we have seen over the last 45 days, I think there are members on both sides of the aisle who have concerns regarding some of these legislative proposals,” said Tom Quaadman, executive director for financial reporting policy and investor opportunity for the U.S. Chamber of Commerce, which opposes aspects of Obama’s plan.
At the top of the list of contentious proposals is a plan to create an agency to shield consumers from bad loans, unfair credit card fees and overly risky financial products. But not all lawmakers and industry officials believe a Consumer Financial Protection Agency would help. And some believe it might even hurt, including Sen. Mark Warner, D-Va., who said earlier this summer that he wondered whether the creation of such an agency might be “almost too constraining.”
Other Democrats have expressed concerns about the scope of the financial reform proposals, which also include expanding the authority of the Federal Reserve to oversee systemic risk, putting new restrictions on financial derivatives and reining in executive pay.
Many Democrats want to at least slow the pace of these reforms, while Democratic leaders are trying to heed the Obama administration’s desire to get them passed quickly.
A markup of a bill to create the Consumer Financial Protection Agency, for instance, was tentatively scheduled for Sept. 23 in the House Financial Services Committee but has been postponed until at least October. Instead, more hearings will be scheduled on the bill this month, and House Democratic leaders will discuss the proposals in a closed-door meeting with their caucus this week.
“There has obviously been pushback,” one Republican aide said.
A top Democratic leadership aide said the House would be taking up a financial regulatory reform bill next month. But there has been no such commitment in the Senate, which has been almost entirely consumed with trying to get a health care reform bill together.
While Senate Majority Leader Harry Reid, D-Nev., noted Obama’s speech “to reiterate the importance of strengthening the system that keeps financial firms in check,” he has set no timeline for bringing a bill to the floor, and nothing is scheduled in committee.
Financial Services Committee Chairman Rep. Barney Frank, D-Mass., said he was not concerned about the slow pace in the Senate. “We almost always move earlier than the Senate,” he said.
