Factbox: Keys to House-Senate panel on Wall Street reform

(Reuters) - A joint conference committee is merging Wall Street reform bills from the Senate and the House of Representatives to hammer out a final bill to send to President Barack Obama to be signed into law.

Democrats hope to deliver a bill to Obama by July 4.

Below is a look at key points of contention remaining:



The conference has agreed to create a government watchdog for consumers that would regulate mortgages and credit cards. It would be an independent unit in the Federal Reserve, with rule-making power subject to oversight by other regulators.

Final agreement on the proposal is near, pending a deal on whether or not to exempt car dealers.


Lawmakers agreed to limit debit card fees, giving a victory to merchants and a defeat to big card issuers, although card networks such as Visa and MasterCard would not be hit as hard as originally proposed.


Lawmakers agreed to widen audits of the Federal Reserve to include its emergency actions and regular discount window lending, but not its monetary policy.


Lawmakers agreed to make it easier for investors to sue credit rating agencies that overlook key information, and to order the Securities and Exchange Commission to study the agencies. If the SEC doesn’t devise a better plan within two years, it would have to implement a new panel proposed by Democratic Senator Al Franken that would assign rating duties to agencies for new structured debt instruments.


Lawmakers agreed to require hedge funds and private equity funds with more than $150 million to register with the SEC, but exempted venture capital funds from full registration.


Lawmakers agreed to exempt small companies with market capitalization under $75 million from a rule in 2002’s Sarbanes-Oxley laws, enacted after the collapse of Enron Corp, dealing with businesses’ internal financial controls.

The Section 404(b) rule requires companies to provide an auditor’s report on the adequacy of their internal controls. Small businesses have long complained about its costs.


Lawmakers have agreed to give larger banks five years to comply with higher capital standards for bank holding companies that bar certain preferred securities from being used in measuring capital strength. Lawmakers have agreed banks holding $15 billion or less will be grandfathered under the rules.


Lawmakers are close to resolving this issue.

Both the Senate and House bills set up a new government process for seizing and liquidating large financial firms in distress. The Senate would cover the costs of this from sales of the liquidated firms’ assets and, in case of shortfalls, fees on other firms. House negotiators have agreed to drop a proposed $150 billion pre-paid fund but want to ensure there is a plan to cover the cost of any liquidation.


Lawmakers agreed to give the SEC authority to subject broker-dealers to a fiduciary standard when they give investment advice, after a 6 month study on the issue.


Lawmakers agreed to a plan referred to as a “skin-in-the-game” provision, that forces loan originators and securitizers to retain in their portfolios at least 5 percent of the value of loans, rather than shifting all of the risk down the food chain as the debt gets resold.

They also required for an exemption for certain low-risk home loans and alternative risk retention rules for the commercial mortgage-backed securities market.



The Senate bill endorses an Obama administration proposal to ban risky trading by banks that is unrelated to customers’ needs; cap big banks’ future growth and restrict their involvement in private equity and hedge funds.

But the Senate bill leans on regulators to write the details and leaves the door open to weakening the rule later.

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

The Senate has recommended a modified rule based on amendments from Democratic senators Jeff Merkley and Carl Levin, and with exemption that would let banks make small investments in private equity and hedge funds.


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 clearing houses.

The Senate bill goes a step further and requires banks to spin off their swaps-trading units. Banks whose profits would be hurt oppose this. So do some regulators.

Wall Street firms that dominate the market -- Goldman Sachs ,JPMorgan Chase ,Citigroup ,Bank of America ,Morgan Stanley and Wells Fargo -- are lobbying hard against changing the rules.

But aides have said the proposal from Democratic Senator Blanche Lincoln will be in the final bill, in some form.


Lawmakers are divided on whether shareholders should have an easier way to nominate corporate board directors. Most senators want shareholders to own at least 5 percent in a company to nominate a board director. House Democrats disagree.

Reporting by Kevin Drawbaugh, Andy Sullivan, Kim Dixon, Rachelle Younglai, Charles Abbott, Roberta Rampton; Additional reporting by Karen Brettell and Kristina Cooke in New York; Editing by Cynthia Osterman