• Financial Reform Package Nearly Primed for House Floor Debate...
  • December 29, 2009
  • Law Firm: Blank Rome LLP - Philadelphia Office
  • ...But first, the House Rules Committee will meet this afternoon and Wednesday to consider nearly 250 amendments that have been filed to the Wall Street Reform and Consumer Protection Act of 2009 (H.R. 4173), initiating a process that will set the parameters for a series of votes to occur during three days of floor consideration that could begin later this week.

    Reflecting increasing pressure from Capitol Hill for the Obama administration to ramp up existing mortgage foreclosure prevention efforts, Rep. John Conyers (D-MI) and Zoe Lofgren (D-CA) have offered an amendment to H.R. 4173 that reincarnates a highly controversial provision--known as “cramdown”--which would allow bankruptcy judges to modify the terms of troubled mortgages.

    Identical to the language passed by the House in March under the Helping Families Save Their Homes Act of 2009 (H.R. 1106), the Conyers-Lofgren amendment would authorize bankruptcy courts to modify mortgage repayment periods, interest rates and fees, and even the principal balance if a borrower provides evidence that efforts to complete a loan modification through the Obama administration’s “Making Homes Affordable” program have failed. Despite passage in the House, the cramdown legislation has twice been voted down in the Senate during separate votes in 2008 and 2009.

    Below is a list of other key amendments that the House Rules Committee will consider this week:

    • Rep. Spencer Bachus (R-AL)--Republican substitute amendment that includes a new chapter of the bankruptcy code to wind-down certain non-bank financial institutions; the creation of a consumer protection council comprised of existing Federal regulators; the removal of statutory reliance on credit rating agencies; and reform of Fannie Mae and Freddie Mac.
    • Rep. Walt Minnick (D-ID)--Amendment that replaces the Consumer Financial Protection Agency (CFPA) with a Consumer Financial Protection Council (CFPC), comprised of 12 members, including, among others, the Secretary of Treasury, the Chairman of the Federal Reserve and the chairman of the CFTC and SEC.
    • Rep. Kanjorski (D-PA)--Amendment that eliminates exemptions from requirements under the Sarbanes-Oxley Act regarding external audit of internal controls that have been provided to public companies with less than $75 million in market capitalization.
    • Rep. Maurice Hinchey (D-NY)--Amendment that prohibits a financial institution from engaging in both commercial and investment banking through the reinstating of the Glass Steagall Act.
    • Reps. Frank (D-MA) and Peterson (D-MN)--Amendment that imposes position limits for physical commodities and addresses agency jurisdictional issues regarding swap trading by providing the CFTC with jurisdiction over swaps and the SEC with jurisdiction over swaps primarily based on securities.

    FRW will continue to provide updates in the hours and days ahead as the House readies H.R. 4173 for the floor.