Ted Kaufman had been getting a lot of attention lately for his amendment, co-sponsored by Senator Sheldon Brown, called the SAFE Banking Act.
This bill would create size and leverage limits on banks and non-bank financial firms. Under the bill, no single banks would be allowed to hold more than 10% of the total amount of all U.S. bank deposits, leverage limits would be set at 6%, and non-deposit liabilities would be capped at 2% for banks and 3% for non-bank firms. The bill’s deposit cap would result in the shrinking of asome of the largest U.S. banks.
The amendment was voted on yesterday and failed, 61-33. Two Republicans voted yes, Richard Shelby and Tom Coburn. Carper voted no. (Are you surprised?)
Other interesting developments: Shelby’s amendment, which would have created the CFPA (Consumer Financial Protection Agency) in the FDIC instead of the Federal Reserve (basically gutting the agency and making it weak) failed 38-61.
Bernie Sanders’s much-discussed “Audit the Fed” Amendment now looks likely to pass. A deal was announced yesterday, which slightly weakened the amendment.
Earlier on the floor today, Sanders and Dodd announced a modification to his amendment to audit the Fed’s outlay of $2 trillion in the banking crisis. The meat of the modified amendment [pdf] is this:
“Notwithstanding any other provision of law, the Board of Governors shall publish on its website, not later than December 1, 2010, with respect to all loans and other financial assistance it has provided during the period beginning on December 1, 2007 and ending on the date of enactment of this Act under the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility, the Term Asset-Backed Securities Loan Facility, the Primary Dealer Credit Facility, the Commercial Paper Funding Facility, the Term Securities Lending Facility, the Term Auction Facility, Maiden Lane, Maiden Lane II, Maiden Lane III, the agency Mortgage-Backed Securities program, foreign currency liquidity swap lines, and any other program created as a result of the third undesignated paragraph of section 13 of the Federal Reserve Act.”
That’s still a pretty broad audit. In addition, according to Sanders’ statement on the floor, saying it “would allow the GAO to conduct a top-to-bottom audit of all of the Federal Reserve’s emergency lending activities since December 1, 2007. In addition, the modifications require the Fed to put on its Web site all of the recipients of over $2 trillion in emergency assistance since December 1, 2007,”
The vote on the Sanders amendment will be on Tuesday.
If you’re interested in following the financial reform debate, there are two great resources to check: Americans for Financial Reform and Demos.