Now that the Senate has passed the financial regulation reform, we're off to conference. Annie Lowery has the basics of how it will proceed.
The conference committee is comprised of senior members of the committees that worked on the bills. In this case, that means the House Financial Services Committee, the Senate Banking Committee and the Senate Agriculture Committee — expect to see Rep. Barney Frank (D-Mass.), Rep. Spencer Bachus (R-Ala.), Sen. Richard Shelby (R-Ala.) and Sen. Saxby Chambliss (R-Ga.) as well as Dodd, Lincoln and others. The committee will prepare a “conference report,” splitting the difference between the House and Senate bills; the House and Senate approve the report and then, once signed by President Barack Obama, the bill becomes law. Frank, the head of the House Financial Services Committee, says he expects that done by July 4.
What can the conference committee change? It cannot introduce any new language to the bill. It can only adopt either House or Senate measures, or split the difference between the two. (That said, if the bill needed new language coming out of conference committee, there are ways to tack it on.)
As for the bills and those key differences that have to be reconciled, the most succinct presentation is Pat Garofalo's good summary in this table.
(Note: Click through to the original to follow the links in the table.)
The CFPA is likely to revert to the Senate version. The stronger, independent agency in the House bill got some signficant opposition in the Senate, in both caucuses. Pelosi is committed to an independent agency, but the Senate will likely prevail to get the final bill through the House.
The derivatives language in the Senate bill is stronger. One of the key issues is the Lincoln provision to force the large banks to spin off their swaps trading desks, which the White House and Dodd are opposed to. Lincoln will be on the conference committee, and will still be in her primary run-off, and will want to keep this. It will likely survive in some form. Then there's the derivatives loophole that Cantwell has been fighting (she ended up voting against final passage of the bill), that there's no enforcement mechanism for the mandate that all trades go through clearinghouses. The White House says that this is a misinterpretation of the language, and that the enforcement mechanism loops back to the Commodities Exchange Act. Since the White House and Dem leadership apparently don't consider this a loophole, it's unlikely to be closed in conference.
The Volker Rule, a ban on proprietary trading that Merkley and Levin were trying to get in the bill, exists in the Senate bill as an instruction for regulators to study it and come up with something. The study it authorizes will probably stay in.
The White House is opposed to the auto dealer exemption. The Republicans in the Senate forced a non-binding instruction to conferees to include it, since they had to withdraw Brownback's amendment that would have included it to avoid a vote on Merkley-Levin. But that was non-binding and conferees can happily ignore it. The exemption is very unlikely to survive the conference, given the administration's opposition.
The resolution fund created a whole lot of hot air out of the Senate Republicans ("permanent taxpayer bailout") and the White House is not supportive of it. Barney Frank told Bloomberg that "he wouldn't push" to keep it, so it will likely not survive conference.
Another issue not on the Wonk Room chart is the Fed audit, which is much broader in the House bill. The Treasury and White House are opposed to the broad audit, so the more limited Sanders amendment will most likely prevail.