WASHINGTON — Key Democrats vowed Friday to protect the House- and Senate-passed financial regulation bills’ core provisions against a final offensive by financial-industry lobbyists.
Crucial differences between the two bills must be resolved in a House-Senate conference committee, which is expected to begin meeting soon after the Memorial Day recess. Senate leaders hope to have the final bill to President Barack Obama by July 4.
The financial industry is gearing up for a major battle over provisions in the Senate bill that would force some of the nation’s largest banks to give up a multibillion-dollar business in derivatives trading and could restrict the trades they make with their own funds.
Democratic leaders declined Friday to forecast the fate of those provisions. But whether they are weakened or removed, lawmakers said public revulsion over the excesses of Wall Street had forged a powerful consensus for Obama’s vision for reform.
“Once public opinion got engaged, it blew away the lobbyists, the money, campaign contributions. Public opinion drove that bill,” said Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee, who steered the bill through the House. “And that will make an easier conference.”
The biggest battle will be to reconcile regulation of the market of financial instruments known as derivatives — complex contracts that allow traders to bet on the direction of prices of stocks, commodities and other assets.
The House and Senate voted to regulate derivatives, requiring them to be traded through public exchanges and clearinghouses. But the Senate bill also has a provision by Sen. Blanche Lincoln, D-Ark., that would force the nation’s biggest banks to spin off their profitable derivatives desks.
