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Inside Washington (05/19/2010)
* WASHINGTON (5/20/10)--Senate Banking Committee Chairman Christopher Dodd (D-Conn.) introduced an amendment Tuesday that would give regulators the power to eliminate a proposed plan by Sen. Blanche Lincoln (R-Ark.) that would require banks to divest their swaps desks. Dodd’s measure would require the proposed Financial Stability Oversight Council to analyze the impact of the swaps ban within a year of enactment. After that, the Treasury secretary could decide to lift the ban if a “material adverse impact” on the markets is found (American Banker May 19) ... * WASHINGTON (5/20/10)--An amendment to the regulatory reform bill by Susan Collins (R-Maine) has raised concern among investors who argue that her provision would stop the use of trust-preferred securities as a form of Tier 1 capital for bank holding companies. The amendment, approved unanimously last week, would ultimately allow regulators to impose strict capital standards on banks and their holding companies, and nonbank firms considered systemically risky (American Banker May 19). Collins said she intended for the standards to apply to systemically important firms only, but as the amendment stands now, all bank holding companies would have to comply once the law is enacted. The amendment also would force banks with more than $250 billion in assets to meet capital requirements as strict as smaller banks’. It doesn’t make sense for capital and risk standards for big banks to be more lenient than those at smaller banks, she said last week in a statement ... * WASHINGTON (5/20/10)--An amendment approved Monday to the regulatory reform bill would give consumers free access to their credit scores if they are denied or given unfavorable terms on a loan, or if they are otherwise harmed because of poor credit. Financial industry observers say that forcing lenders to reveal credit information could cause there to be less competition. Citibank doesn’t want Capital One to know what its credit ranges are--and Capital One doesn’t want Discover to know what its credit ranges are, said John Ulzheimer, head of consumer education at Inc. (American Banker May 19). Sen. Mark Udall (D-Colo.), who proposed the amendment, said he aimed to level the playing field for consumers so they have access to all the information they need to make smart financial decisions. Fair Isaac, which offers the FICO score--the mostly commonly used credit score--supports the amendment. It’s important for consumers to understand the industry and how the scores are used, said Lisa Nelson, vice president of scores at Fair Isaac ... * WASHINGTON (5/20/10)--The Senate Tuesday approved an amendment that would give federal regulators more room to pre-empt state laws but still give state attorneys general some enforcement power over national banks. The amendment, by Sen. Tom Carper (D-Del.), preserves state attorneys general’s role in protecting citizens against abusive practices, said Senate Banking Committee Chairman Christopher Dodd (D-Conn.), who authored the regulatory reform bill (American Banker May 19). Under Dodd’s bill, the Office of the Comptroller of the Currency (OCC) could follow the “Barnett” standard, which would allow OCC to pre-empt state laws case by case. Some industry representatives have said the provision would require the agency to take more steps, including proving that the issue a state law is addressing is already being addressed by a federal standard. Carper’s measure removes that language from the reform bill, giving the OCC more flexibility. The amendment “strikes a balance,” Dodd said ...


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