FinReg Conference Committee Reconvenes to Drop Bank Tax

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Tuesday, June 29, 2010 at 4:55 pm

In the next half hour, the conference committee to merge the House and Senate versions of financial regulatory reform will reconvene in an attempt to placate Sen. Scott Brown (R-Mass.). Brown had initially supported the Senate version of the bill, but dropped his support of the conference committee report because it included a $19 billion tax on big banks and hedge funds, included by Rep. Barney Frank (D-Mass.) to make the bill deficit-neutral and to charge banks for the cost of implementation.

It seems likely that the conference committee will leave the bill untouched, save for the $19 billion tax. To ensure the bill does not impact the deficit, House and Senate Democrats have reportedly agreed to end one part of the $700 billion Troubled Asset Relief Program — the Treasury Department program to aid banks and ease the credit crunch — early. Here’s CNBC on the probable compromise:

The conferees will propose ending the Treasury Department’s authority to require banks to accept additional TARP funds. While this authority would sunset over time rather than end immediately, budget rules say that this would result in a savings of something like $10 billion to $11 billion.

Additional FDIC premiums also are being considered to bring in $3.5 billion, bringing the total closer to the $19 billion the lawmakers sought to raise with the bank tax. The Republicans are expected to accept this deal. The biggest banks would be subject to the higher FDIC fees, but not hedge funds, since they are not part of the FDIC system. On the other hand, smaller banks — exempted from the fee under the current bill — that operate under the FDIC system would likely find themselves footing the bill.

Rather than charging the hedge funds and big banks considered most responsible for the financial crisis a reasonable fee for implementation, the conference committee will settle for ending a government stability program and spreading the pain around to all federally insured banks — including small community-focused banks — to satisfy the demands of one Republican. So it goes in Washington.

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North Capitol Street » Blog Archive » FinReg Conference Committee Reconvenes to Drop Bank Tax
Pingback posted June 29, 2010 @ 5:23 pm

[...] full post on The Washington Independent Don't miss a single post! Subscribe to my RSS [...]


North Capitol Street » Blog Archive » Warren Praises ‘Strong’ FinReg Bill, Slams Auto Dealer Carve-Out
Pingback posted June 29, 2010 @ 8:00 pm

[...] evening, the conference committee reconciling the House and Senate versions of the bills reconvened to tweak a final measure to win the last vote for passage. “We may be on the verge of [...]


Your Daily FinReg Centerfold « Around The Sphere
Pingback posted June 30, 2010 @ 6:36 am

[...] Annie Lowrey at The Washington Independent: Rather than charging the hedge funds and big banks considered most responsible for the financial crisis a reasonable fee for implementation, the conference committee will settle for ending a government stability program and spreading the pain around to all federally insured banks — including small community-focused banks — to satisfy the demands of one Republican. So it goes in Washington. [...]


North Capitol Street » Blog Archive » FinReg Update
Pingback posted July 2, 2010 @ 5:05 pm

[...] Sen. Scott Brown (R-Mass.) forced last-minute changes to the bill — taking the cost of implementation away from big banks and hedge funds, and [...]


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Comment posted July 6, 2010 @ 2:30 am

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Surrendering to the Worst « Below the Salt
Pingback posted July 6, 2010 @ 3:02 pm

[...] Interestingly, last-minute changes to the bill — taking the cost of implementation away from big banks and hedge funds, and charging it to the Treasury’s Troubled Asset Relief Plan and all FDIC-insured banks (essentially transferring the expense from the individual banks and their users to all tax payers) were made in conference committee at Senator Brown’s request. [...]


Surrender to the Worst at Your Peril « Below the Salt
Pingback posted July 6, 2010 @ 5:25 pm

[...] Interestingly, last-minute changes to the bill — taking the cost of implementation away from big banks and hedge funds, and charging it to the Treasury’s Troubled Asset Relief Plan and all FDIC-insured banks (essentially transferring the expense from the individual banks and their users to all tax payers) were made in conference committee at Senator Brown’s request. [...]


Surrendering to the Worst « Below the Salt
Pingback posted July 6, 2010 @ 5:31 pm

[...] Interestingly, last-minute changes to the bill — taking the cost of implementation away from big banks and hedge funds, and charging it to the Treasury’s Troubled Asset Relief Plan and all FDIC-insured banks (essentially transferring the expense from the individual banks and their users to all tax payers) were made in conference committee at Senator Brown’s request. [...]


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Surrendering to the Worst : NO QUARTER
Pingback posted July 7, 2010 @ 3:57 pm

[...] is worth pointing out that last-minute changes to the bill were made in conference committee at Senator Brown’s request.  The changes removed [...]


Conference Committee Process: Do Oklahoma Lawmakers Use It Or Abuse It?
Pingback posted July 9, 2010 @ 4:18 pm

[...] FinReg Conference Committee Reconvenes to Drop Bank Tax « The Washington Independent [...]


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