FACTBOX: Major U.S. financial regulation reform initiatives

WASHINGTON (Reuters) - The Obama administration and senior congressional Democrats are moving to tighten financial regulation to prevent another banking crisis like the one now shaking economies worldwide.

Changes will affect banks, insurers, credit rating agencies, hedge funds, private equity firms, brokerages, exchanges and other institutions, while greatly extending the government's reach into the financial sector.

Here is a look at the major issues:

CREDIT CARDS

A U.S. Senate committee and a House subcommittee have approved bills to crack down on the credit card industry by limiting fees and barring retroactive interest rate increases on existing balances, among other steps.

The Federal Reserve finalized new credit card rules last year, but some lawmakers were unhappy with the Fed's long, 18-month implementation period. The Senate bill calls for a nine-month implementation; the House bill for one year from approval, or by July 2010, whichever comes first.

The Senate bill barely passed committee, clouding its chances for full Senate approval. The House bill stands a better chance with Democrats in firm control in that chamber.

The House Financial Services Committee is scheduled to consider and probably vote on the bill on April 22.

Senior administration officials plan to meet on April 23 with 14 top executives from banks with big credit card units.

Political risk exposure: American Express Co (AXP.N), Bank of America (BAC.N), Capital One Financial Corp (COF.N), Citigroup (C.N), Discover Financial Services (DFS.N).

UNWINDING FAILING FIRMS

The administration has sent Congress draft legislation to empower the government to seize and unwind large, failing financial firms that are not banks.

No clear procedure for doing this now exists, as shown by the erratic, case-by-case bailouts of troubled firms such as insurer American International Group Inc (AIG.N).

A seizure would require approval of the Treasury Department, the Federal Reserve and the Federal Deposit Insurance Corp, in consultation with the White House. The Treasury and FDIC would decide whether to offer financial aid to the seized firm or to put it into conservatorship.

The U.S. House Financial Services Committee plans to hold hearings on the legislation in late April and early May.

SYSTEMIC RISK REGULATOR

Treasury wants a single, independent regulator to oversee systemically important firms and critical payment and settlement systems, but has not said which agency should get this job. No agency formally does it now.

Some in Congress favor giving it to the Federal Reserve, but some are skeptical that the Fed is up to the task.

Alternative legislation has been introduced in Congress to establish an inter-agency council on financial stability.

Congress' Joint Economic Committee will hold a hearing on too-big-to-fail banks on April 21.

EXECUTIVE PAY

The House has approved a bill to curb "excessive" employee pay at firms getting government bailout funds.

It would let the Treasury block compensation and bonuses not based on performance standards. It would apply to all employees, not just executives, at bailed-out firms.

The bill now moves to the Senate, where Republicans have more power and could water it down. Some analysts expect passage of a modified version that exempts some forms of compensation and applies only to future bonuses.

HEDGE FUNDS, PRIVATE EQUITY

Treasury has recommended that all advisers to hedge funds, private equity funds and venture capital funds, whose assets under management top a not-yet-determined level, must register with the Securities and Exchange Commission.

The recommendation imposes investor and counterparty disclosure requirements on funds' SEC-registered investment advisers. The SEC would share the reports it gets from funds with the systemic risk regulator, which would decide whether any hedge fund poses a systemic threat and should be subjected to higher standards for systemically important firms.

Political risk exposure: Bridgewater Associates, D.E. Shaw Group, Farallon Capital Management, Citadel Investment Group, Fortress Investment Group (FIG.N).

SHORT SELLING

The SEC has floated five proposals to curb short selling, drawing fire from short sellers who feel they are being made scapegoats for the financial crisis.

The agency is taking public comment for 60 days on the proposals, which include reinstituting the "uptick rule," which allows such bets that a stock will fall only when the last sale price was higher than the previous price.

An SEC round-table will be held on the issue on May 5. Final action is months away.