Financial Reform Blocked in Senate, Again

As Senate Republicans are urging bipartisan financial reform legislation and Senate Democrats are fighting to formally debate the current version of the bill, the Senate remains divided and financial reform remains in limbo, for now. The Senate reconsidered S. 3217, the Restoring American Financial Stability Act of 2010, again today after Senate Republicans voted against debating the legislation on Monday. Once more, Republicans voted against debating the legislation today. The bill would create a consumer financial protection agency, impose a risk retention requirement on banks that sell and securitize mortgage loans, and bring greater transparency to the derivatives market. Republicans said in a statement today they are seeking bipartisan financial reform legislation that will eliminate the notion of “too big to fail” as well as taxpayer-funded bailouts. The move to block a debate of the legislation is being criticized by Senate Democrats like Nevada’s Harry Reid. “The American people … have two simple requests: One, that their leaders look out for their economic security; and two, that their legislators legislate.  In other words, they want us to look out for their jobs and they want us to do our own,” he said in a statement. “Right now, Senate Republicans are refusing to do either.” A spokesperson for Reid’s office said another vote to proceed debating the financial reform bill is scheduled for tomorrow. Multiple statements from Senate Republicans indicate the party is looking to debate financial reform legislation with stronger language to prevent future bailouts. “My vote is not a vote against financial reform; instead it’s a vote to insist that the parties continue bi-partisan negotiations to come up with a commonsense bill we can all be proud of,” said Sen. Scott Brown (R-MA), in a statement. “As currently written, the legislation contains loopholes that could leave the taxpayers on the hook for future bailouts of Wall Street.” Sen. Mike Johanns (R-NE) echoed the sentiment that the bill fails to prevent government bailouts. He also claimed in a statement that the bill threatens rural farmers and other employers in Nebraska — “who had nothing to do with the financial crisis,” he said. “As we learned during the health care debate, it can be very difficult to make substantive changes to a bill through the amendment process, so we should not move to this bill until we get it right,” he said in a statement. “Bipartisan negotiations have been productive and are headed in the right direction. We shouldn’t undercut those talks by bringing a flawed, partisan version to the Senate floor.” On the Senate floor Tuesday, Sen. Mitch McConnell (R-KY) said the bill “hurts Main Street” and US businesses like Harley Davidson, Ebay and the maker of M&M’s and Snickers. “Clearly, this bill isn’t finished. It falls short of our constituents’ demands to prevent future bailouts, and it’s expected to hurt America’s job creators at a time when we need jobs most,” he said in a statement. He urged fixing the bill through “a simple tweak in the language” or a closed loophole before taking up debate on the legislation. “Unfortunately, the Democrat Majority seems less interested in fixing this bill than in some political win they think they’re scoring by not fixing the bill. It’s a total waste of the people’s time,” McConnell said. Write to Diana Golobay.

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