Senate Passes Banking Reform Legislation
This story appears in the May 31 print edition of Transport Topics.
The Senate passed its version of banking reform on May 20, including provisions that would impose tighter regulations on the trading of derivatives such as crude oil.
The bill, which passed 59-39, also would impose greater oversight on the banking industry, create a federal agency to protect consumers from unscrupulous bankers and limit the amount banks could charge merchants for accepting credit or debit cards.
Sen. Blanche Lincoln (D-Ark.), chairwoman of the Senate Agriculture Committee and author of the derivatives language, said the legislation “brings a $600 trillion market into the light of day and ends the days of Wall Street’s backroom deals.”
Traders would be required to report in real time the derivative trades they make, but end-users such as truckers who use these types of trades to hedge against cost increases still would be allowed to do so.
“These strong reforms will rein in the greedy behavior that nearly destroyed our economy,” Lincoln said in a statement.
Tim Lynch, senior vice president of federation relations and strategic planning for American Trucking Associations, said the trucking group supports the Lincoln language, but expects that getting it through the upcoming House-Senate negotiations may be difficult.
“We expect a pretty strong battle maintaining the language in conference because Wall Street is so upset about the language,” he said. “While we were heartened by what went on in the Senate, we still have a major hurdle to get over in conference.”
The House passed its version of financial reform in December, and Rep. Barney Frank (D-Mass.) said after the Senate vote that he expected the two bills to be merged quickly.
“The two bills are very similar, and the House is ready to go to conference to work out the remaining issues,” Frank said in a statement. “I am confident that we can have a bill ready for President Obama’s signature very soon.”
Sen. Richard Shelby (R-Ala.), the top Republican on the Senate Banking Committee, said he hoped the conference process would be one “where we all are participants . . . and come out with a good piece of legislation, but we’ll have to see about that.”
On May 25, the Senate named its conferees for the negotiations, including Lincoln and Shelby. The House is expected to name its negotiators following the Memorial Day recess.
Bloomberg News contributed to this story.
