Geithner Bangs Drum For Financial Reform Package

As key senators continue work on crafting a bipartisan bill for financial reform, the Obama administration will meet with major trade organizations today in an effort to build momentum.

Treasury Secretary Timothy Geithner will meet this morning with the leaders of a handful of groups, including the US Chamber of Commerce, the Financial Services Roundtable, The Financial Services Forum, the Securities Industry and Financial Markets Association, the Securities Industry and Financial Markets Association, and the Independent Community Bankers Association, according to an industry source.

Timothy Geithner

“It’s about getting everyone together to support a bill,” the source said of the meeting scheduled for 11 a.m. ET.

A package of sweeping financial reform is among the Obama administration's top priorities and Congress has been working on legislation since late last spring.

The Senate Banking Committee is still struggling to draft a package that will appeal to both Democrats and Republicans, even though the House passed its version of the multi-part legislation by a modest margin late last year.

Senate negotiators are stuck on the issue of creating a new consumer watchdog, known as the Consumer Financial Protection Agency, which has the strong support of President Obama.

The GOP opposes a new stand-alone agency, which would have both rulemaking and enforcement power, although it acknowledges the need for some new measures. Democrats are said to be flexible on the structure and identity of the agency just as long as its powers are both sizable and significant.

Senate Banking Committee Chairman Christopher Dodd (D-Tenn.) and Sen. Bob Corker (R-Tenn.) have been working closely on crafting a bipartisan bill for the past three weeks and say they are making progress.

Dodd said two weeks ago he hoped to have a bill by the end of the month, but that now appears unlikely.

Wall Street and the banking industry generally oppose the creation of a powerful agency, but are otherwise generally supportive of financial reform, whose proponents say is critical to averting another economic crisis.

Christopher Dodd (CT - D)
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Other key parts of the bill include federal resolution authority for too-big-to-fail financial institutions, as well as the creation of a systemic regulator. Support for those measures is considerable, although there are still minor differences on some of the details.

Washington analysts say time is running out, with the White House anxious for progress on the bill.

The president recently has stepped up his own efforts to push the regulatory reform agenda, weaving it into many recent speeches, which is seen as a way of supporting Dodd's efforts.

There are also logistical concerns. Any compromise draft bill will be part of a long process, starting with debate at the committee level. And even if the Senate approves a package of reforms, it is likely to require reconciliation with the House version, followed by more voting.