FACTBOX-20 ways US House, Senate financial reforms differ

Feb 18 (Reuters) - Bipartisan compromise talks resumed in the U.S. Senate last week over financial regulation reform, after an impasse led to a breakdown in negotiations.

Senate Banking Committee Chairman Christopher Dodd, a Democrat, said he was talking with Republican Senator Bob Corker about drafting a bill that could gain wide support.

Dodd had been talking before with Senator Richard Shelby, the committee's top Republican, but they could not agree.

Senators have been debating a crackdown on bank and capital market oversight for more than a year. The House of Representatives approved a bill in December, adopting many recommendations made by President Barack Obama in mid-2009.

Here are some of the key differences between the House bill and the latest approaches to regulation reform in the Senate:

* CONSUMER PROTECTION. House bill proposes new, fully independent U.S. Consumer Financial Protection Agency (CFPA) to regulate mortgages, credit cards, other products. Draft bill proposed in November by Dodd also calls for CFPA.

Dodd bill exempts fewer businesses from CFPA oversight than House bill, and makes state consumer protection laws less vulnerable to federal preemption.

Bank lobbyists and Republicans oppose CFPA. Seeking compromise, Dodd last month discussed with Republicans downgrading CFPA to less than an independent agency, possibly making it a division of the Treasury Department. Dodd-Shelby talks broke down over a compromise along those lines.

Corker also opposes an independent agency, making this issue the central obstacle to a bipartisan reform deal.

* BANK BREAKUP POWER. Both bills empower regulators to order firms to divest businesses that are too risky. Aides say this could include hedge fund and private equity interests like those targeted by the "Volcker rule" proposed in January by President Barack Obama.

House bill says Treasury must approve any order to divest more than $10 billion in assets, while president must rule on any divestiture above $100 billion. These check-offs absent from Dodd bill.

* PROPRIETARY TRADING BAN. House bill says Fed can ban risky firms from proprietary trading. Dodd bill does not.

Dodd is looking at adding House language to his bill, addressing another aspect of the proposed "Volcker rule."

* RESOLUTION FUND. House bill creates $200 billion fund to help pay for Federal Deposit Insurance Corp (FDIC) actions to dismantle insolvent, non-bank financial firms.

Fund gets $150 billion from fees paid by firms with more than $50 billion in assets. Fee threshold for hedge funds is $10 billion. Fund can get $50 billion more if needed from Treasury borrowings.

Dodd bill covers FDIC actions with after-the-fact fees on firms with assets topping $10 billion.

Republicans want to set up a special bankruptcy court as the first recourse for troubled firms before they enter the FDIC resolution process.

Corker has been working on this issue for weeks with Democratic Senator Mark Warner. They are close to agreement.

* BANK SUPERVISION. House bill closes Office of Thrift Supervision, merges it into Comptroller of the Currency, but preserves Fed's, FDIC bank supervision roles.

Dodd bill originally created single super-cop for banks, stripping Fed, FDIC of bank supervision roles.

Possible compromise in Senate involves OCC-OTC merger, and strips Fed of bank supervision, but preserves FDIC's present role and gives its some former Fed duties.

* SYSTEMIC RISK REGULATION. House bill creates inter-agency council to police systemic risk in economy. It relies heavily on Fed as agent for executing policy. Dodd bill sets up new agency to do same job, with much smaller role for Fed.

* HIGHER STANDARDS. Dodd bill imposes incrementally tighter standards on firms with total assets above $10 billion as they present more risk to financial stability. House bill focuses tighter standards on large, "systemically important" firms.

* STRESS TESTS. House bill would require that firms that are subject to stricter standards undergo regular "stress tests." Dodd bill does not.

* FED MONETARY POLICY. House bill subjects Fed monetary policy for first time to new scrutiny by congressional watchdog. Dodd bill does not.

* FED LENDING POWER. Both bills impose new limits on Fed 13(3) emergency lending. House bill puts $4 trillion cap, imposes check-offs by other authorities. Dodd bill does not.

* SECURED CREDITOR HAIRCUT. House bill would let secured creditors in FDIC resolution actions have up to 10 percent of claims treated as unsecured claims. Dodd bill does not.

* FDIC EMERGENCY ACTION. House bill allows FDIC to guarantee debts of solvent firms up to $500 billion, with approval of new systemic risk council, Treasury, president.

Dodd bill allows FDIC to guarantee debts of firms in receivership, with approvals from senior officials.