Reuters: Wall Street scores a win in Washington, eyes more victories

12 December 2014

Five years after President Barack Obama slammed Wall Street "fat cat" bankers, some of the nation's biggest banks this week successfully lobbied Congress to roll back a hotly debated provision in the 2010 Dodd-Frank financial reform law.

The question is whether bankers can keep up their winning streak. The early view is that Wall Street, insurers, and companies that deal in complex financial instruments will secure targeted victories in 2015, especially with Republicans in control of the Senate. But Democrats who chafe at the idea of bank handouts will block any measures that could gut Dodd-Frank, one of Obama's signature legislative accomplishments.

Lawmakers also gave the Federal Reserve more flexibility in writing certain requirements for insurance companies such as Prudential Financial.

Obama was forced to lobby indignant Democrats to support the funding bill in spite of the Dodd-Frank rollback provision, even as JPMorgan Chase Chief Executive Jamie Dimon was also calling Democrats to support the bill.  Some Republicans were taking a victory lap. "Yesterday showed the first cracks in the wall for Dodd-Frank," Saat Alety, a spokesman for Republican Representative Ed Royce of California, said about the spending bill. Bank lobbyists are taking a more reserved view, saying it will be difficult to overcome Obama's veto power for major blows to Dodd-Frank. "The battle lines, so to speak, will continue to be drawn," said James Ballentine of the American Bankers Association.

There is also broad support for changes to the bankruptcy code that would be tailored to banks. Currently, Dodd-Frank lays out a path for unwinding failing banks that Wall Street supports but that Republicans find unworkable. Further, Congress may act to exempt small banks from a proprietary trading ban known as the Volcker rule, to change the way mortgage rules treat certain fees, and to give some relief to Wall Street banks' international swaps trades.

Full article on Reuters


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