S 3271 | Financial Reform Bill Summary Part 2

New York City Financial District buildings

The Senate Financial Reform Bill summary has a few major differences from the House bill. Image from Flickr.

The U.S. Senate is set to debate a Financial Reform Bill this week or next — finally. The House of Representatives passed HR 4173 in December (see a full Financial Reform Bill Summary in Part 1 | HR 4173), and the Senate will be taking up the issue soon. The Senate Financial Reform Bill Summary differs in some major ways from the House bill, and before any of the Financial Reform Bill summaries become law, they must be reconciled, approved again, and signed by the President. So how does the Financial Reform Bill Summary in the Senate differ in giving same day cash loans to financial companies from the House bill, and what will likely be included in the final Financial Reform Bill?

Financial Reform Bill Summary | S 3271

As of right now, S 3271, better known as the Restoring American Financial Stability Act of 2010, is in committee debate. Both the Senate Banking Committee and Senate Agriculture Committee (yes, agriculture) have the bill under debate right now, and when those bills emerge they must be melded. Harry Reid is expected to offer a compromise of some kind that will meld the two committee bills. If the amended version of S 3271 is approved by the Senate, the bill must be reconciled with HR 4173 before it becomes law.

S 3271 Financial Reform Bill Summary | Similarities to HR 4173

While the House and Senate Financial Reform Bill summaries do vary significantly, there are some similarities. Both financial reform bills ask Hedge funds and Private equity firms to register with the government and submit to oversight. Both bills give the Securities and Exchange Commission new authority, including regulatory powers. Shareholders are also given a non-binding advisory vote on executive compensation in both bills. Both financial reform bills also create a council to monitor financial risk in the economy. The government would also be able to seize and disassemble large failing companies, though the details of how are different.

S 3271 Summary | Financial Reform Bill Consumer Protections

The consumer protections in S 3271 would be mostly built into the Federal Reserve. A division within the Federal Reserve would be charged with writing and enforcing new rules about financial products like payday loans no fax, mortgages, and credit cards.

Financial Reform Bill Summary | Bank regulation

The Federal Reserve, in addition to being held responsible for consumer protection, would also oversee any bank that has more than $50 billion in assets as well as some “non-bank lenders” – like mortgage companies. A Federal Reserve regulator would be able to force a bank to either reduce risk or stop risky financial transactions.

Financial Reform Bill S 3271 Summary | Too Big To Fail

While both the House and Senate bills have a provision allowing the government to break up failing financial companies, the Senate bill includes a funding provision. Large financial companies would be required to pay into a $50 billion FDIC-like fund that would finance the dissolution of failing firms.

S 3271 Financial Reform Bill | Derivative Regulation

Like the House bill, the Senate bill aims to regulate derivative products. The exact way derivatives will be subjected to oversight is under intense debate right now, and last-minute political maneuvering well most likely change the original writing of the bill.

This is a summary of the Senate bill 3271 – Restoring American Financial Stability Act of 2010. If this bill passes the Senate, it must be reconciled with HR 4173, Wall Street Reform and Consumer Protection Act. In the end, the Financial Reform Bill Summary will most likely include the major provisions of both of these bills, though the details of regulation and financial reform could differ greatly.


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