Wednesday, January 06, 2010

20 Ways House, Senate Financial Reforms Differ

When the U.S Senate resumes this month they plan on getting right to work on financial regulation reform. However, according this article the legislation they are going to be considering will differ greatly from the bill that was approved by the House of Representatives. Reuters identified a list of the top 20 differences, which you can view below.

Resolution Fund

House bill creates $200-billion fund to help pay for Federal Deposit Insurance Corp (FDIC) actions to dismantle insolvent, non-bank financial firms.

The fund gets $150 billion from fees paid by firms with more than $50 billion in assets. Fee threshold for hedge funds is $10 billion. The fund can get $50 billion more if needed from Treasury borrowings.

Senate Banking Committee Chairman Christopher Dodd's bill, main vehicle for reform in Senate, covers FDIC actions with after-the-fact fees on firms with assets topping $10 billion.

Secured Creditor Haircut

In House bill, secured creditors in FDIC resolution actions may have up to 10 percent of their claims treated as unsecured claims. Dodd bill does not contain this so-called "haircut" provision.

FDIC Emergency Action

House bill allows FDIC to guarantee debts of solvent firms up to $500 billion, with approval of new systemic risk council, Treasury, president.

Dodd bill allows FDIC to guarantee debts of firms in receivership, with approvals from senior officials.

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