Senate panel plans financial reform vote Monday

Senate Banking Committee Chairman Chris Dodd (D-CT) unveils his financial reform substitute on Capitol Hill in Washington, March 15, 2010.

WASHINGTON (Reuters) - The U.S. Senate Banking Committee was on track on Monday to approve landmark financial regulatory reform legislation, pushing a fight over the issue to the full Senate in April.

A committee vote would be the Senate's biggest step yet toward putting in place new rules for the financial system, two years after Bear Stearns' collapse ushered in the worst financial crisis in decades, which tipped the economy into a deep recession and unleashed reform efforts worldwide.

The Senate committee has abandoned plans for a week-long debate of roughly 400 amendments that were to be offered by Republicans and Democrats to a bill unveiled last week by the panel's chairman, Democratic Senator Christopher Dodd.

The move reflects a tactical decision by Republicans to avoid an embarrassing series of defeats for their amendments at the committee level, and to move their fight against reforms to the full Senate where they think they have better odds.

The House of Representatives approved a bill in December that embraced many reform proposals made by President Barack Obama in mid-2009. Failure by the Senate to produce a bill would end hopes for a broad rewrite of financial rules.

The Senate committee is expected to convene at 5 p.m. (2100 GMT) on Monday, and likely approve Dodd's bill in a party-line vote that would send it to the Senate floor after a two-week Easter recess scheduled to begin on Friday.

Republican Senator Bob Corker -- a first-term committee member who tried but failed to hammer out a bipartisan deal on legislation with Dodd -- said developments over the weekend led to a decision by committee Republicans' on handling the bill.

In an interview with CNBC television, Corker said, "I think it's probably true that we have a better opportunity with a different cast of characters -- the full Senate -- to do something that is sound policy wise."

Over the weekend, documents obtained by Reuters showed that Republicans had more than 300 amendments to offer to weaken or kill the Dodd bill, with no clear focus among them. Republicans have yet to offer a single bill as an alternative to Dodd's.

Corker predicted the committee would approve the bill on Monday evening with only Democratic votes. He said he sees a full Senate vote sometime after the Easter break.

He said there was still a 90 percent chance that financial reform would ultimately be passed by the Senate.

COMMITTEE VOTE WOULD MOVE SENATE AHEAD

Dodd has the votes to ram a Democratic bill through the committee, but would almost certainly need to pick up some Republican support to get a bill through the full Senate.

Democrats control 59 votes out of 100 in the chamber, but would likely need to muster 60 votes to overcome procedural roadblocks that Republicans are likely to throw up.

Treasury Secretary Timothy Geithner on Monday reaffirmed that the Obama administration wants a bill with strong consumer protection, that limits risk-taking by big financial firms and shields the economy from future crises.

In remarks to be delivered to a think tank, Geithner seemed to be addressing senators involved in the reform debate. He questioned amendments aimed at weakening reforms and exempting certain financial firms and instruments from tougher rules.

"Ask why we should be protecting those private interests at the expense of the public interest," Geithner said.

Some banking committee Republicans maintain they want to reform regulation, and recognize that Congress needs to act quickly since lawmakers will soon refocus on political campaigns ahead of the November elections.

Unlike Republicans, Democrats have not agreed to withhold amendments at the Monday evening bill-drafting session.

So some amendments may arise, but Dodd has moved to minimize possible delays from Democratic amendments by incorporating about two-dozen into his bill, according to a document obtained by Reuters on Monday.

REPUBLICANS, BANKERS ALLIED

Since the crisis peaked a year and a half ago, financial reform proposals have been fiercely debated, with Republicans allying themselves with the deeply unpopular financial industry as it fights to block reforms that threaten bank profits.

The documents obtained by Reuters summarized Republican amendments. One amendment, for instance, would have stripped Dodd's proposed Financial Stability Oversight Council of the power to assign risky nonbank financial firms to Fed supervision. Another would have deleted a provision in Dodd's bill establishing a fund to help pay for orderly liquidations of distressed financial firms.

Another would have blocked Dodd's plan to transfer supervision of hundreds of state-chartered banks with assets of less than $50 billion to the Federal Deposit Insurance Corp from the Fed, the documents show.

The summary also said Republicans wanted to delete major portions of the Dodd bill dealing with over-the-counter derivatives regulation and new rules for credit-rating agencies, while referring to unspecified substitute plans.

(Additional reporting by Karey Wutkowski and David Lawder; Editing by Andrew Hay)