FACTBOX-Keys to U.S. House-Senate panel on Wall St reform

May 28 (Reuters) - A U.S. congressional conference committee starting work in early June must merge Wall Street reform bills from the Senate and House of Representatives.

The final legislation could differ from the bills already passed. Once finalized, it would have to be approved again by both chambers, then sent to President Barack Obama to be signed into law. That could happen by July 4, analysts say.

Here are the key points of contention in the conference.

FINANCING 'ORDERLY LIQUIDATION'

Both bills set up a new government process for seizing large financial firms in distress and liquidating them.

The Senate would cover the costs of this from sales of the liquidated firms' assets and, in case of shortfalls, fees on other firms. The House would set up a $150 billion fund paid into in advance of any actions by large firms.

Banks don't want to pay any fees upfront.

PROTECTING CONSUMERS

Both bills create a government watchdog for financial consumers to regulate mortgages and credit cards.

The Senate puts it inside the Federal Reserve. The House makes it an independent agency.

Most industry lobbyists and Republicans bitterly oppose the watchdog proposal, no matter where it is housed. They will push to block an independent agency, carve out exemptions for a range of businesses and restrict its powers.

A related issue is how much power state authorities have over banks. Industry will push for more state constraints.

VOLCKER RULE

The Senate bill endorses this Obama administration proposal to ban risky trading by banks that is unrelated to customers' needs. But the bill leans on regulators to write the details and leaves the door open to weakening the rule down the road.

The Volcker rule is not in the House bill, although it would let regulators bar proprietary trading in cases where it threatens the stability of the financial system.

Some form of the rule is expected to be in the final measure. Banks will push to kill it or water it down.

OVER-THE-COUNTER DERIVATIVES

Both bills seek to redirect as much of the $615-trillion over-the-counter derivatives market as possible through more accountable channels such as exchanges and clearinghouses.

The Senate bill goes a big step further and requires banks to spin off their swap-trading units. Banks whose profits would be hurt oppose this. So do some regulators. The White House has made clear it does not view the provision as a high priority.

Wall Street firms -- Goldman Sachs (GS.N), JPMorgan Chase (JPM.N), Citigroup (C.N), Bank of America (BAC.N), Morgan Stanley (MS.N) and Wells Fargo (WFC.N)-- that dominate the market are lobbying hard against changing its rules.

INCREASED CAPITAL REQUIREMENTS

Both bills call for higher capital requirements on banks and financial firms as they get bigger and assume more risk.

Neither bill spells out much detail, however, largely leaving that up to regulators -- with one difference.

The Senate bill would make bank holding companies adhere to the same capital standards as bank subsidiaries. It would also bar bank holding companies from counting certain kinds of hybrid securities in meeting a key measure of strength.

Bank lobbyists will work hard in conference to kill this additional Senate provision. But its author, Senator Susan Collins, was one of only four Republicans to vote for the Senate bill. So she could have an edge.

REGULATING HEDGE FUNDS

Both bills require hedge funds to register with the government and open up to more scrutiny. The House calls for registration of hedge funds worth $150 million or more; the Senate's threshold is $100 million.

The Senate exempts venture capital funds and private equity funds. The House exempts venture capital funds from full registration and requires offshore funds to register.

These differences must be bridged in conference.

CREDIT RATING AGENCIES

The Senate bill would upend the industry's business model by interposing, in some cases, a new government panel between rating agencies and debt issuers. The House bill does not do this. The agencies will face more regulation either way.

DEBIT CARDS

The Senate bill would limit debit card fees and the House bill would not. Fee limits would be a victory for merchants and a defeat for big card firms. Bank lobbyists will push to kill the limits in conference.

FED SCRUTINY

The Senate bill would expose the Fed's emergency lending during the 2007-2009 financial crisis to a one-time congressional investigation. The House bill would extend congressional scrutiny to Fed decisions on interest rates.

Fed officials oppose the House approach, but have said they can live with the Senate version.

FIDUCIARY STANDARDS

The House bill would force brokers who provide financial advice to adhere to the same standard as investment advisers, who have a 'fiduciary duty' requiring them to act in their clients' best interest. Brokers now must only ensure that a financial product is suitable for a client.

The Senate bill only calls for a study of the issue. (Reporting by Kevin Drawbaugh, Andy Sullivan and Rachelle Younglai, with Karen Brettell in New York)