Senate Republican Defends "Yes" Vote On Financial Reform

Chuck Grassley (R-Iowa), one of four Republicans in the Senate that voted yesterday to pass financial reform, sent a statement to reporters on Friday justifying his support for the bill.

“There’s no question this bill has flaws," he said. "But a message needs to be sent to Wall Street that business-as-usual is over. After what happened leading up to the 2008 financial crisis, something’s got to change."

During the nearly three week long debate on the bill, Grassley offered a number of amendments aimed at increasing transparency within the financial regulatory sector, three of which passed. One of those amendments would put in place for employees of credit-rating agencies the same whistle-blower protections enjoyed by corporate employees.

Though earlier in the week he voted multiple times against cutting off debate on the bill, Grassley said the need to reform the way Wall Street works is what ultimately convinced him to change his mind.

"Taxpayers need protection," he said. "Big banks and financial institutions took advantage at the expense of average Americans, and the system let them get away with it. This bill takes a step in the direction of trying to fix things."

Obama Senses Victory After Senate Passes Key Vote On Financial Reform

President Barack Obama thanked the Senate on Thursday for voting to end debate on a key financial regulatory reform bill. The 60-40 vote means that the bill can now proceed to the floor for a final vote.

Though two Democrats, Sens. Russ Feingold (Wisc.) and Maria Cantwell (Wash.), broke with their party and voted no to ending debate for a second straight day, three Republicans, Sens. Olympia Snowe and Susan Collins of Maine, and Sen. Scott Brown (Mass.) voted yes, giving 57 Democrats the minimum number of votes they needed to block a filibuster.

Addressing reporters in the White House Rose Garden following the vote, the President praised the Senate for moving the bill forward, but cautioned against celebrating prematurely.

“We’ve still got some work to do,” he said, reminding supporters that the Senate still must pass its bill before it moves to conference. “There’s no doubt that during that time, the financial industry and their lobbyists will keep on fighting.”

But so will the administration. Four weeks ago, Mr. Obama memorably went to Wall Street to make the case for reform. Since then, the President and his financial reform team have hit the road in an attempt to sell the public on the plan. And earlier this week, the President was successfully able to convince Senator Brown to break with Republicans and change his vote, from no to yes.

As a result, the White House feels confident that they’ve won Round One of the battle.

“Over the last year, the financial industry has repeatedly tried to end this reform with hordes of lobbyists and millions of dollars of ads,” said the President. “Today, I think it’s fair to say that these efforts have failed.”

Measure To Reform Fannie And Freddie Fails

A trio of Senate Republicans failed in their quest to put an end to the days of taxpayer bailouts for Fannie Mae and Freddie Mac.

The GSE (Government Sponsored Enterprise) Bailout Elimination and Taxpayer Protection Amendment, sponsored by Sens. John McCain (R-Ariz.), Richard Shelby (R-Ala.) and Judd Gregg (R-N.H.), would have forced the government to relinquish control of the two government-backed mortgage giants within two years.

Recently, Fannie Mae, which lost $13.1 billion during the first quarter of this year, asked the government for an additional $8.4 billion to stay afloat. Similarly, Freddie Mac asked the government for $10.6 billion in funds after reporting a loss of $8 billion for the quarter. Combined, the two companies have borrowed $145 billion from the Treasury Department since the government took complete ownership of them during the heart of the nation’s financial collapse in 2008.

"We are not saying that Freddie and Fannie have to go out of business. We're saying we want them to be a business that is on a level playing field with other private sector competitors," said McCain to reporters today, hours before his amendment went down in a 56-43 vote.

Though most Republicans supported the item, it had its fair share of skeptics.

First, critics, including many Democrats in Congress, believed the measure would unwind Fannie and Freddie so quickly that it would create chaos throughout the entire housing market. House Financial Services Committee Chairman Barney Frank (D-Mass.), who has said he supports reforming the two GSE’s, called the amendment a huge gamble.

“Simply to abolish Fannie and Freddie...and not do anything to replace the functions they are now performing with a conservatorship, would be a disaster for housing, and therefore for the economy as a whole,” he said last week.

Furthermore, the liberal Center for American Progress recently referred to the legislation as “The Credit Crunch Restoration Act of 2010,” arguing that by abolishing a large chunk of the mortgage backing industry, millions of Americans would lose access to credit.

Sanders Amendment To Financial Reform Bill Passes Easily

An amendment to increase the transparency through which the Federal Reserve (Fed) operates passed on Tuesday by a vote of 96-0.

The measure, sponsored by Sen. Bernie Sanders (I-Vt.), would require the Government Accountability Office (GAO) to conduct a one-time audit of the powerful central banking agency, going back to December 1, 2007. At a press conference with reporters immediately following the vote, Sanders praised his colleagues for their unanimous support.

"What just transpired is an historic vote for the American people in terms of finally bringing transparency to what is perhaps the most powerful federal agency, and that is the Fed," he said.

A similar amendment that would've required the GAO to conduct a far more wide-ranging audit, and would've made such audits recurring, failed by a vote of 62-37. The measure was the product of Sanders's initial, less watered-down effort to shine more light on the Fed, mirrored after a proposal put forth by Reps. Ron Paul (R-Texas) and Alan Grayson (D-Fla.) that passed the House last year.

After Sanders modified his amendment, Sen. David Vitter (R-La.) re-introduced the original version.

Reed Amendment Would Strengthen Regulation On Investment Pools

By Justine Rellosa
Talk Radio News Service

During a conference call Monday, Sen. Jack Reed (D-R.I.) said he will soon introduce an amendment to the Senate's financial regulatory reform bill aimed at closing loopholes within the financial sector.

Reed’s bill would require investment pools, such as hedge funds, private equity funds and venture capital funds, to register with the Securities and Exchange Commission (SEC). According to Reed, this would boost transparency within the greater system.

“This approach is designed to give the regulators better insight about size, leverage and risk-taking in private pools of capital and I think that is going to be helpful,” he said.

Specifically, Reed wants to require advisers that fall short of the new $100 million adviser registration threshold to either register with the SEC or open their documents to state regulators for inspection.

Reed said he will introduce his amendment on the floor next Monday and assured that there is bipartisan support for it.

“By in large, there is strong support on both sides."