The conferees from the U.S. Senate and House of Representative have reached an agreement on a financial regulatory reform package, reconciling the differences between the bills approved in the two chambers.

Swipe-Fee Reform
Despite aggressive lobbying from the banking industry, the Wall Street Reform and Consumer Protection Act of 2009 (H.R. 4173) includes the NSBA-supported compromise swipe fee reform language. For more on the compromise, please click here.

While the financial regulatory reform legislation approved in the House did not address swipe-fee reform, the Senate conferees stood firm in their insistence that some version of the amendment introduced by Sen. Dick Durbin (D-Ill.), making reasonable and common-sense reforms to the nation’s credit and debit card systems, was included in the final bill.

While the conference committee’s swipe-fee compromise was not ideal and painful concessions were made, NSBA was pleased with the progress its implementation would signify and urged its adoption without alteration.

Consumer Financial Protection Bureau Regulations
Provisions pertaining to rulemaking within the nascent Consumer Financial Protection Bureau also were included in the final package. The provisions originated in an NSBA-supported amendment introduced by Sens. Olympia Snowe (R-Maine), the ranking member of the U.S. Senate Committee on Small Business and Entrepreneurship, Mark Pryor (D-Ark), Lindsey Graham (R-S.C.), Robert Menendez (D-N.J), Al Franken (D-Minn.), Christopher "Kit" Bond (R-Mo.), John Thune (R-S.D.), and Roland Burris (D-Ill.).

The provisions would ensure that the Consumer Financial Protection Bureau would consider how its rulemakings would affect America’s small businesses by requiring it to conduct Regulatory Flexibility Analyses in conjunction with any rulemaking. They also would require the Bureau to consult with a Small Business Advocacy Review Panel prior to the publication of any proposed rule, with the Review Panel’s recommendations published in any eventual proposal.

Again, the financial regulatory reform legislation approved in the House did not include these small-business protections but the Senate conferees were obstinate in their push to retain them. Despite an initial, failed Conference Committee vote on an amendment offered by conferees Reps. Judy Biggert (R-Ill.) and Heath Shuler (D-N.C.) and Rep. Sam Graves (R-Mo.), ranking member of the U.S. House Committee on Small Business to restore the Snowe-Pryor amendment, the language finally made it into the final compromise package.

The Senate conferees were aided in this effort by a letter of support for the inclusion of the provisions circulated by the following members of the Democratic Blue Dog Coalition: Reps. Joe Baca (D-Calif.), Dan Boren (D-Okla.), Dennis Cardoza (D-Calif.), Christopher Carney (D-Pa.), Ben Chandler (D-Ky.), Travis Childers (D-Miss.), Jim Costa, Henry Cuellar (D-Texas), Brad Ellsworth (D-Ind.), Frank Kratovil (D-Md.), Betsy Markey (C-Co.), Walt Minnick (D-Idaho), (D-Calif.), Glenn Nye (D-Va.), Mike Ross (D-Ark.), and Gene Taylor (D-Miss).

NSBA appreciates the support of these members of Congress and is especially grateful to Sen. Snowe for her Herculean efforts to ensure that the affect on small businesses is considered during future rulemakings within the Consumer Financial Protection Bureau.

Outlook
The House and Senate now must separately approve the reconciled financial regulatory reform package. House Democrats—who may take up the bill as early as this week—need a simple majority to approve it, which should not be an obstacle, given their 255-178 numerical advantage.

The outlook in the Senate is less clear, however. Senate Democrats need 60 votes to approve the overall measure. The original Senate bill was approved 59-39, with four Republicans: Sens. Snowe, Susan Collins (R-Maine), Charles Grassley (R-Iowa), and Scott Brown (R-Mass.) voting for it and two Democrats: Sens. Maria Cantwell (D-Wash.) and Russ Feingold (D-Wis.) voting against it.

With the passing of Sen. Robert C. Byrd (D-W.V.), Democrats need to retain this Republican support. Several of the Republicans who voted for the original Senate bill, however, voiced concern with language approved in the final hours of the Conference Committee deliberations that would impose up to $19 billion in assessments on large banks and hedge funds to offset the costs of the legislation. Brown went so far as to say he would vote against the reconciled legislation if this provision was not addressed.

In the wake of this threat, House and Senate conferees hastily reassembled late yesterday afternoon in an attempt to offset the cost of the legislation via different means. Senate Democrats were expected to propose shutting down the Troubled Asset Relief Program (TARP) and using any unused funds from that program to pay for the new bill.