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December 2, 2009 - The House Financial Services Committee approved its ninth bill to address regulatory reform on December 2, H.R. 3996, legislation to address systemic risk and “too big to fail” institutions.
The regulatory reform legislation passed in the Committee address credit rating agencies, the proposed consumer financial protection agency (CFPA), investor protection, over-the-counter derivatives, the creation of a federal insurance office, the registration of private investment advisors and most recently, systemic risk.
The systemic risk legislation would create a Financial Services Oversight Council to monitor systemic risk in the financial services arena. The chairmen of the federal banking agencies including the National Credit Union Administration are voting members of this Council. The Council would have an Advisory Board made up of a state bank supervisor and state insurance commissioner, both nonvoting members.
The legislation would also establish a new process for winding down large, financially troubled non-bank institutions in a manner that does not impact taxpayers. In addition, it would impose higher scrutiny on bank holding companies and non-bank institutions.
An amendment was passed prior to Thanksgiving exempting credit unions from paying into a systemic risk fund to address losses. Initially, the bill could have assessed credit unions with more than $10 billion in assets for payments into the fund.
Chairman Frank is hopeful that regulatory reform legislation will be considered on the House floor by the Christmas recess. The Senate Banking Committee is also revising its versions of regulatory reform legislation, following the withdrawal of Chairman Chris Dodd (D-Conn.) encompassing discussion draft.
To see more information about bills passed by the House Financial Services, follow this link.
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