Today, the Senate will choose its representatives on the financial-reform conference committee, which will get together after the Memorial Day recess to reconcile the House and Senate versions of the financial-reform bill.
Likely conferees include Banking Committee Chair Chris Dodd, his ranking member, Richard Shelby, Agriculture Chair Blanche Lincoln, and Ag ranking member Saxby Chambliss. We may also see Mark Warner, Judd Gregg, or Bob Corker join the ad hoc panel. The House will pick its representatives after Memorial Day, but you can bet that House Financial Services Chair Barney Frank, ranking member Spencer Bachus, and Agriculture Committee Chair Colin Peterson will be participating.
Just as important, the Senate will first take two test votes -- motions to instruct the conferees concerning particular issues. While the votes aren't binding, they do send a signal regarding the Senate's views on particular topics. The first vote will be on Sam Brownback's attempt to exempt auto lenders from consumer-protection regulation. The second will be on Kay Bailey Hutchison's provision to weaken language that bars banks from speculating with their own capital -- basically, an attack on the Volcker rule. If either passes, conferees will be under pressure to weaken the final legislation, but they don't have to -- especially if they think the politics of a strong bill will force dissenters to support the entire package despite their efforts to create loopholes for industry interests.
-- Tim Fernholz
