February 7, 2011 / 5:51 PM / in 7 years

Senate memo shows fight awaits Dodd-Frank foes

WASHINGTON (Reuters) - The uphill push faced by Republicans in trying to roll back last year’s Dodd-Frank law was made clear on Monday by a memo from the Senate Banking Committee pledging to protect financial reforms.

The agenda memo, obtained by Reuters, showed the Senate committee, still under the control of Democrats, will examine much the same issues being targeted by its counterpart panel in the Republican-controlled House -- but with different goals.

Oversight of Dodd-Frank by the Senate panel will focus on assuring that “the letter and the spirit of the law are being implemented by the regulatory agencies,” the memo said.

The Senate panel will seek to ensure that public comment is being considered; that the new law is being enforced; that legitimate concerns regarding the act are considered; and that “regulators have adequate resources to perform their work and are using the resources efficiently,” it said.

In contrast, a House Financial Services Committee agenda obtained last week called for weighing the “costs and benefits” of Dodd-Frank “to improve those parts of the act that work well while changing those parts that do not.”

At the same time, House Republicans are trying to kill budget increases that the Securities and Exchange Commission and Commodity Futures Trading Commission both say they need to implement and enforce scores of new Dodd-Frank regulations.

Since winning majority control of the House in November, Republicans have said they want to use their new-found clout to soften Dodd-Frank. At the same time, they have acknowledged that their prospects were daunting in the face of continued Democratic control of the Senate and the White House.


The other top items on the to-do list of the Senate committee, under its Democratic Chairman Tim Johnson, are housing finance reform, and oversight of the 2008-2009 federal bailouts, said the memo dated February 2.

Johnson has replaced Democratic Senator Christopher Dodd, who retired, as chairman. Johnson has been reaching out to the entire committee for input, said spokeswoman Julianne Fisher. His “working draft agenda is still being finalized,” she said.

In the House, Republican Spencer Bachus is now chairman of the financial services committee. He replaced Barney Frank, who is now the panel’s top Democrat.

One part of Dodd-Frank to be scrutinized by the Senate panel, possibly in public hearings, includes the creation of a Consumer Financial Protection Bureau (CFPB).

A study by the Financial Stability Oversight Council on identifying some large banks and non-bank financial firms as “systemically significant” and subjecting them to stricter regulation also was mentioned as a priority item.

Limits mandated by Dodd-Frank on debit card fees and how card networks operate also may be examined, the memo said.

On housing finance and mortgage giants Fannie Mae and Freddie Mac, the memo said the Senate panel will try “to find areas of agreement for possible legislation.”

It listed these starting points for discussion: preserving “affordable, 30-year, fixed-rate, prepayable mortgages”; equal access for lenders to the secondary market, and for borrowers to mainstream housing finance; better mortgage servicing; and “stable, liquid, and efficient mortgage markets.”

The committee has several Obama administration nominees to key regulatory posts that it must consider, said the memo.

These include Peter Diamond, a nominee for Fed governor; Katharine Abraham, a nominee for the president’s Council of Economic Advisors; and a successor to Federal Deposit Insurance Corp Chairman Sheila Bair, whose term expires in mid-2011.

Also coming before the committee will be an as yet unnamed nominee to be CFPB director; and a replacement for Republican SEC Commissioner Kathleen Casey, whose term expires this year.

Reporting by Kevin Drawbaugh; editing by Carol Bishopric

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