Status of Regulatory Reform: House/Senate Conference Expected to Commence Week of June 7

June 4, 2010 — With the Senate approval of S. 3217 on May 20, the House and Senate leadership will now reconcile the Senate bill with H.R. 4173, the regulatory reform package approved by the House in December 2009.

The House/Senate conference is expected to begin after the Memorial Day recess during the week of June 7. The goal is to have a bill to the President to sign by July 4. House Financial Services Committee Chairman Barney Frank (D-Mass.) is expected to chair the conference; however, House conferees have yet to be announced. The Senate has named its conferees: Democrats: Sens. Chris Dodd, Tim Johnson, Tom Harkin, Blanche Lincoln, Patrick Leahy, Charles Schumer and Jack Reed; Republicans: Sens. Richard Shelby, Saxby Chambliss, Mike Crapo, Judd Gregg and Bob Corker.

One main element of reconciliation will be how to address consumer protection. The House bill includes a separate stand-alone agency, the Consumer Financial Protection Agency (CFPA). In the Senate legislation, a bureau of consumer protection would be established at the Federal Reserve. Both bills address systemic risk, derivatives, "too big to fail," and other elements of financial reform.

NASCUS will continue to encourage the Congressional leadership to ensure state regulators are part of the mechanism for systemic risk mitigation. Both bills include a group for systemic risk mitigation, but the Senate version lacks a role for state regulators. NASCUS sent a letter to Senate conferees on June 1 about the importance of changing this part of the legislation, and including a state credit union regulator on the group.

Further, NASCUS will continue to closely watch preemption issues during the House/Senate conference. With last minute changes to the Carper amendment to S. 3217, the standard for preemption of state consumer protection laws by national banks was better for the states than expected, but the House version is considered less preemptive.

"As the two bills are reconciled by the House and Senate, NASCUS is hopeful we can ensure state regulators are part of mechanisms for systemic r"isk mitigation and that preemption of state consumer protection laws is not taken any further, said NASCUS President and CEO Mary Martha Fortney. "NASCUS will continue to promote the importance of state regulatory authority, state consumer protection laws and state chartering options as the House and Senate reach consensus on the two bills."