WASHINGTON (Reuters) - Legislation to improve U.S. government handling of failing large firms that are not banks, like AIG, is being developed by a key House of Representatives committee and may come to a vote soon, aides said on Monday.
In a sign Congress is moving fast on President Barack Obama’s top financial regulation reform priority, a bill to create a process for unwinding failing non-bank firms is among the measures likely to come before the House Financial Services Committee for a possible vote on March 31, aides said.
The Washington Post reported on its website that the Obama administration plans to send legislation to Congress this week seeking power to seize non-bank financial companies.
Treasury Secretary Timothy Geithner was expected to argue for the new powers at a hearing on Capitol Hill on Tuesday about government oversight of bailed-out insurer American International Group (AIG.N), the newspaper reported.
Washington deemed AIG as being too big to be allowed to fail, which would pose broad systemic risks to the economy and financial system, and bailed it out with about $180 billion in taxpayer money.
Aides said the agenda for the House Financial Service committee’s March 31 session could change and other items may be scheduled for consideration, as Congress scrambles to respond to the worst U.S. financial crisis in generations amid a deep recession.
Geithner is slated to testify on the principles of the Obama administration’s regulatory reform agenda to the same committee on Thursday.
Obama is expected to carry those principles to a summit of world leaders in London on April 2, where reform of financial regulation is expected to be a major topic.
Reporting by Kevin Drawbaugh; Editing by Neil Stempleman