According to the WSJ, these appear to be the most anticipated amendments to watch for FinReg. I don't know the order of these amendments or whether they will come up for a vote, but these are the ones which would change the overall structure of the bill.
Endgame Amendments on Financial Overhaul
Interestingly...there's no discussion on Carper's preemption amendment, but there are rumors that Dodd won't allow the amendment to come up for a vote.
Here's what the WSJ lists as the final four amendments to the bill and I'll go along with the likelihood of passage.
- Cantwell/McCain: Sens. Maria Cantwell (D., Wash.) and John McCain (R., Ariz.) plan to offer an amendment that would essentially reinstate some of the rules crafted after the Great Depression that forced a division between commercial banks and investment banks. The bill would have major implications for big banks like Goldman Sachs Group Inc., Morgan Stanley, Citigroup Inc., J.P. Morgan Chase & Co., and Bank of America Corp. This amendment could attract support from liberal Democrats and conservative Republicans, leaving a block of centrists as potentially the main opposition.
I'm going to put the chances of Glass Steagall getting in the bill at about 30-40% chance. While it's true there will be support and the left and maybe some support on the right, I just don't see the "middle" of the Senate voting to accept this. With the Obama administration not taking any sides on this amendment, absent a change in that status, this thing will fail.
- Merkley/Levin: Sens. Jeff Merkley (D., Ore.) and Carl Levin (D., Mich.) are pushing an amendment that would prohibit "proprietary" trading at banks that have access to things such as federal deposit insurance. It would also direct the Securities and Exchange Commission to ban "conflicts of interest" in securities trading. The White House is supporting this amendment, while Wall Street bankers oppose it.
I'd say this has a very good chance of passing. Especially if the Glass Steagall amendment fails. For those who don't know this is the full Volcker Rule. The one included in the bill right now is sort of a study approach. There's not any republican co-sponsors, but I don't know if that is determinative. Based on what we've seen on derivatives and other amendments, republicans have been withholding support until the last minute. Watch Grassley, Snowe and Collins to vote for this and perhaps others.
- Brownback: Sen. Sam Brownback (R., Kan.) is offering one of the most anxiously awaited amendments, which would prohibit a proposed Consumer Financial Protection Bureau at the Federal Reserve from enforcing new rules against auto dealers. The White House is trying to kill the amendment, but the vote is expected to be very close. Auto dealers argue the financial-overhaul bill would unfairly punish them for mistakes made by Wall Street.
I have no idea whether this one will pass. It will be close as the journal says. The NYT wrote a favorable article for the dealers today (too favorable in my view). That said, opposition is quite strong. The military has been very strong in opposing this portion, and Holly Petraeus (yes the wife of the Centcom Commander) has been leading the fight with Dick Durbin and Jack Reed.
- Vitter: Sen. David Vitter (R., La.) has an amendment that would prohibit federal regulators from allowing the Federal Reserve to examine commercial companies, such as manufacturers and industrial giants, that don’t make at least 85% of their revenue from financial services. The amendment would essentially limit the Fed’s ability to designate these firms as "systemically significant" and they also wouldn’t have to pay for the failure of systemically important financial companies. Liberal groups have attacked this amendment, saying it would allow General Electric to escape federal supervision even though its GE Capital unit is a major financial services company. Vitter said in an interview that GE Capital would still be regulated by the Fed but the amendment would protect GE and other industrial companies from having to face Fed regulation. "I have a huge concern about the bill overall allowing the government to grab control of the economy," Vitter said. "I’m looking for ways to appropriately limit that."
For the most part, the FED has been winning a good portion of the battles against it or at the very least, limiting the brunt of the attacks on its sovereignty. I can't see this amendment passing especially with heat on Vitter.
All in all these are things to watch for this morning as the bill will likely be wrapped up in the Senate on Wed or Thurs. If there is no pre-emption amendment and the auto exception fails, then by default, this bill is stronger than the House's with the likely inclusion of the Volcker Rule added in, makes a good case for simply ping-ponging the legislation to President Obama's signature.