Bill Headed to the Floor, At Last

It appears that debate on financial regulatory reform legislation will finally begin now that Republican Senator Richard Shelby has walked away from negotiations with the bill’s chief sponsor, Democratic Senator Chris Dodd.

Republicans had cited the talks between Alabama's Shelby and Connecticut's Dodd, the leaders of the Senate Banking Committee, as a reason why it was premature to bring the sweeping reform legislation to the Senate floor. Early this afternoon, a motion to proceed on the bill failed for the third day in a row, thanks to unanimous opposition by Republicans and from Democratic Senator Ben Nelson of Nebraska. Now that solid wall of opposition may crumble.

Shelby said that Dodd “has assured me that he will address a number of concerns I have expressed with respect to ending bailouts.” But the two weren’t able “to make any meaningful progress on other components of the legislation,” Shelby said.

“It is now my belief that further negotiations will not produce additional results,” he said.

Shelby said he will continue to vote against bringing the bill to the Senate floor. Some other Republicans, however, likely will switch their votes now that Shelby’s talks with Dodd are over. “I thank my Republican colleagues for their support and defer to their individual judgments on whether the Senate begins a floor debate on this bill,” he said.

Shelby’s biggest problems with the bill are its new consumer financial protection bureau, which he said would have “unchecked authority,” and its restrictions on derivatives, which “would have far-reaching and devastating effects” on Main Street, as well as Wall Street.

He noted he “was not provided the opportunity to share my views on a single aspect of the derivatives provision.”

Dodd said his talks with Shelby were productive, “but I cannot agree to his desire to weaken consumer protections given the enormous abuses we have seen.”

Dodd said it’s time for the Senate to engage in “a serious, vigorous debate” on financial reform, which he called “one of the most serious issues this Senate has faced in my 30 years serving in this body.”

“Members must be allowed to offer amendments,” Dodd said. “We must allow many voices to be heard as we work to create a sound foundation for our nation’s future economic strength.”

Senate Minority Leader Mitch McConnell of Kentucky said he hopes “the majority’s avowed interest in improving this legislation on the Senate floor is genuine and the partisan gamesmanship is over. I remain deeply troubled by a number of provisions in this bill and will work aggressively in the days ahead to ensure that the majority does not use our mutual interest in regulating Wall Street to extend the federal government’s unwanted hand into Main Street.”

McConnell also claimed victory, of a sort, from the delays imposed by his party’s decision to block debate on the bill for three days.

“The time afforded by my Republican colleagues and Senator Ben Nelson was instrumental in gaining assurances from the chairman that changes will be made to end taxpayer bailouts and the dangerous notion that certain financial institutions are too big to fail,” McConnell said.

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Kent Hoover is the Washington bureau chief for bizjournals.