WASHINGTON – Banking and business lobbyists prepared a last-ditch effort Friday to scale back ambitious new regulations governing the financial industry, hoping to sway congressional leaders who are putting the finishing touches on the legislation.
Only a handful of key differences exist between the bill passed by the Senate on Thursday and an earlier version approved by the House, leaving opponents little time to push for changes.
“The House and the Senate will have one more opportunity to fix this legislation, and we will be engaged,” said David Hirschmann, president of the U.S. Chamber of Commerce’s Center for Capital Markets Competitiveness.
The center already has waged a $3 million campaign against the legislation’s proposed consumer financial protection agency. Now the chamber also will lobby for retaining the House’s broader exemption for nonfinancial businesses – such as airlines, farmers and big manufacturers – from rules governing complex financial instruments known as derivatives.
The bill would require most derivatives to be traded on public exchanges or through clearinghouses.
Auto dealers will renew their campaign to win an exemption from the consumer agency’s oversight, as the House bill would allow. And large Wall Street banks will continue to fight a provision in the Senate version that would force them to spin off their lucrative derivatives businesses.
“The banks are still an enormously powerful presence in Washington,” said Travis Plunkett, legislative director for the Consumer Federation of America.
“They’re going to do everything in their power to sneak through last-minute changes behind closed doors.”
But time is running out. A House and Senate conference committee is expected to iron out differences in the two versions of the legislation and have a bill ready for President Barack Obama to sign before Congress breaks for the July 4 holiday.
Bank stocks have been falling for the past month, largely out of fears about the European economy, but also because of predictions that more government oversight would eat into profits.
A report this week by researchers at Goldman Sachs Group Inc. predicted that the Senate version of the legislation could cut earnings at big banks by as much as 23 percent.