WASHINGTON (Reuters) - U.S. representative Barney Frank, a fierce critic of Wall Street and close ally of the Obama administration, will head a House-Senate committee to hammer out a final bill on financial regulation reform.
Joining Frank on the panel will be Senator Christopher Dodd, the Democratic author of a Senate bill on the issue, as well as Democratic Senator Blanche Lincoln and Republican senators Richard Shelby and Saxby Chambliss, aides said.
The Senate had been expected to name the other senators on the panel, but it adjourned on Monday without doing so. Aides said leaders hope to make an announcement in a day or so.
A source close to Senate discussions said the following eight other senators would be named to it: Democrats Tim Johnson, Charles Schumer, Tom Harkin, Patrick Leahy and Jack Reed, and Republicans Mike Crapo, Judd Gregg and Bob Corker.
One Senate aide said that list was valid, but no official confirmation was available.
House Speaker Nancy Pelosi must name the members of the panel from the House of Representatives. She may wait until the second week in June to do that, aides said.
As chief author of the House’s bill, Frank can be expected to press for a tough crackdown on bank oversight, although his bill is in some ways less hard-hitting than the Senate‘s.
Under the Senate bill approved just last week, for instance, banks would have to spin off their swap-trading desks into affiliates. That provision, authored by Lincoln in the Senate, is not in the House bill.
Banking interests are digging in for a last attempt to water down reforms and carve out loopholes for themselves. The legislation, once enacted, will be the biggest overhaul of financial regulation since the Great Depression of the 1930s.
Dodd, riding a wave of voter antipathy toward Wall Street bailouts and big bonuses for bankers, pushed his version of Wall street reform through the fractious Senate last Thursday night after three weeks of dramatic debate.
Dodd and Frank, both Democrats, are committed to reform following the 2007-2009 financial crisis that slammed economies worldwide, unleashing a powerful political backlash against Wall Street and a global wave of reform initiatives.
Their conference committee must merge the House and Senate measures into a single bill, pass it through both chambers and send it to President Barack Obama. He is expected to sign it promptly into law. That could happen by July 4, analysts say.
The final shape of the legislation will also depend on the other members of the panel.
The Lincoln provision is not in the House bill. Nor is a plan for setting up a new government panel to choose credit rating agencies to assess new debt instruments.
Lincoln, chairman of the Senate Agriculture Committee, faces a difficult primary election run-off on June 8 in Arkansas, her home state. The conference committee probably will not get down to work until after that date.
The Senate on Monday approved a nonbinding measure from Republican Senator Sam Brownback that aims to exempt car dealers, as the House did, from the oversight of a new federal financial consumer watchdog. The vote to approve was 60 to 30.
The Senate voted 87 to 4 to approve a motion from Republican Senator Kay Bailey Hutchison to tell the conference to set limits on applying to insurance companies the limits on proprietary trading proposed for banks under the Volcker rule.
“Proprietary trading is essential to the life insurance and property-casualty insurance industries,” Hutchison said.
The rule -- named for its author, White House economic adviser Paul Volcker -- is another example of the Senate bill being somewhat tougher. The House bill does not contain the rule, but it would let regulators ban proprietary trading in cases where it threatens financial stability.
The Senate bill explicitly endorses the rule, but lets regulators write the details for it, possibly watering it down. Senators Carl Levin and Jeff Merkley, both Democrats, want to harden that provision to reduce regulators’ latitude.
“I urge our colleagues in both chambers as they discuss final Wall Street reform legislation ... to strengthen the Dodd proprietary trading provisions, and to include a ban on conflicts of interest,” Levin said in floor remarks on Monday.
Frank has said the conference may take about a month.
Shelby and Chambliss both voted against the Senate bill. They are the senior Republicans on the banking and agriculture committees, respectively. Dodd chairs the banking committee.
Additional reporting by Andy Sullivan, Thomas Ferraro, Roberta Rampton, Charles Abbott. Writing by Kevin Drawbaugh; Editing by Richard Chang