A key House committee aims to have two components of sweeping regulatory reform legislation finished by the August recess but other key parts of the package won’t be taken up until legislators return in September, according to a senior Congressional staffer Monday.
The plan now is for the House Financial Services Committee to mark up and vote on bills covering say-on-pay powers for shareholders and the consumer financial protection agency and then send them onto the House leadership by the time the recess begins August 3.
In June, there was some hope that the whole package could be completed by the August recess, but given the complexity of the historic package, lawmakers will need more time.
“We would have liked things moved up to a month or two,” said Steven W. Adamske, communications director of the House Financial Services panel, which is chaired by Massachusetts’s Democrat Barney Frank.
Adamske said the extended time frame is in no way a setback. “There are a lot of issues we have to work out and there’s a lot of legislative writing," he said.
The subjects of OTC derivatives regulation, a systemic regulator, resolution authority and the consolidation of frontline bank and thrift regulators will be taken up when legislators return after Labor Day, the second week of September.
Individual bills covering the various subjects will be wrapped into a comprehensive piece of legislation that will go to a vote in both houses on Congress. The President and Democrat leaders are pushing to get regulatory reform legislation signed into law by the end of the year.
Regulatory reform of the financial sector has been competing with health care reform in what’s been an unusually busy and sometimes frenetic summer for lawmakers.
Even though a White House team submitted a comprehensive reform plan to Congress, health care is widely considered to be the more important of the two for the Obama administration.
Nevertheless, each week has brought a parade of public hearings on the various parts of the financial reform effort and this week is no exception.
Federal Reserve Chairman Ben Bernanke, Treasury Secretary Timothy Geithner and FDIC Chairman Sheila appear will all testify on Capitol Hill before either the House Financial Services Committee or the Senate Banking Committee this week.
The House committee will go a step further with "say on pay" on Thursday when it is expected to begin marking up legislation authored by Rep. Frank.
The committee late last week released a discussion draft of the bill, which has many similarities to Treasury Department proposals released last week , as well as a Frank-sponsored bill that passed the house by a wide vote in 2007.
Among other things, it would give shareholders of all kinds of company advisory votes on executive compensation, require the Securities and Exchange Commission to issue guidelines of compensation and its connection to excessive risk taking, and increase disclosure requires for financial firms in particular.
The Obama administration has already imposed compensation restrictions on financial firms receiving government aid. About a dozen firms, including Goldman Sachs , Morgan Stanley , American Express , JPMorgan Chase have received approval to return the money.
Full Politics & Economic Coverage
Pushing through legislation on executive compensation and consumer protection may be easier to do in a post-crisis environment, but even the more straightforward components of the package have drawn opposition from various quarters, including some Democrats.
For instance, the administration’s proposals giving more power to the Federal Reserve—such as the role of systemic regulator—have generated far more criticism than might have been expected from both sides of the political aisle.
Regulation of OTC derivatives—those that are traded outside of formal exchanges—has provoked harsh opposition from GOP lawmakers and industry.