How financial reform bill is shaping up
Senate Majority Leader Harry Reid (D-Nev.) picks up a stack of petitions from U.S. citizens asking for financial industry reform during a press conference at the U.S. Capitol in Washington, D.C.
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Kai Ryssdal: The Senate is working its way through a long, long list of amendments to the 1,400 page financial reform bill. It's going to be another couple of weeks before the thing is wrapped up and longer than that before it's matched up with the House version. But amendments are where it's at if you want to get a some idea of what the final bill is going to look like. So our Washington bureau chief John Dimsdale is here to talk about how the bill is shaping up. Hi, John.
JOHN DIMSDALE: Hello, Kai.
RYSSDAL: All right, so hit the high points for me. What are some of the big amendments coming up on this bill?
DIMSDALE: Well, some of these are getting pretty populist. There's one to limit how big banks can get. This is aimed at the six biggest banks, the ones that we've been hearing about -- Goldman Sachs and Citigroup. There's also a proposal to reinstate that wall that used to separate traditional banks from investment banks, and the other financial institutions that trade stocks and bonds. There's growing support for an amendment to subject the Federal Reserve to an outside audit. There's also a proposal to cap ATM fees, and maybe even credit card interest rates. And the so-called Volcker rule will get a vote. That would prevent banks from wheeling and dealing in stock trading for their own profit.
RYSSDAL: Let me back you up just a second. Limiting ATM fees, so you mean the $2.50 I pay to get $20 bucks out of somebody else's bank, right?
DIMSDALE: That's right, that's right. The current average fee for people using another bank's ATM is now over $2.50. Iowa Democrat Tom Harkin is proposing that banks not be able to charge more than 50 cents per transaction. He says it cost banks less than 50 cents a transaction to provide the service.
RYSSDAL: Well, speaking of protecting consumers, and I guess that falls into that category. What about this consumer financial protection agency that is in the House bill and has sort of been bounced around in the Senate bill? Where do we stand with that?
DIMSDALE: Well, Republicans tried this afternoon to put some limits on a consumer agency, to put under the supervision of the Federal Deposit Insurance Corporation and to restrict its jurisdiction over non-banks: the payday lenders, car loan companies, all the small businesses like doctors and florists that can set up flexible credit arrangements with their customers. But the democrats want a consumer agency with real teeth, and they voted to keep the current agency, which has more independence, even though it is housed in the Fed.
RYSSDAL: Speaking of the Fed, John, there is an amendment out there, as you mentioned, to subject the Fed to a government accountability office audit, right?
DIMSDALE: That's right. Opponents are really worried that this is a way for Congress to put pressure on the Fed to keep interest rates low. That's always a popular thing, especially during election years, but of course, the risk there is that the Fed would be afraid to raise rates when they need to be raised, and we would have higher inflation.
RYSSDAL: Remind us of how this amendment came to be. It's all about the trillions of dollars that the Fed sort of plowed into this economy during the financial crisis.
DIMSDALE: Right, people like Ron Paul over in the House have been pushing this for several years. But under the current crisis they want to know who got the money from the TARP. The $2 trillion of money that went to financial service companies, and the Fed has never said who got it, and this audit would reveal that.
RYSSDAL: OK, so here's the $64,000 question, John. Which of these amendments might pass, and which might not?
DIMSDALE: Well, you know, there's growing momentum behind pretty much every one of these. It's true that there are a lot of provisions here for liberals to like a lot. But the outrage against Wall Street crosses party lines. That Fed audit, like I said, is sponsored by Ron Paul over in the House, and he's hardly a liberal Democrat. The sponsors of that amendment to limit the size of banks are fond of quoting Alan Greenspan, who said that any bank that is too big to fail is just too big.
RYSSDAL: Funny how Alan Greenspan keeps coming up, isn't it? John Dimsdale in our Washington bureau. Thank you, John.
DIMSDALE: You're welcome.