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Legislative Updates: May 2009


Capitol Call

The month of April was much less hectic on Capitol Hill than previous months. When Congress is not in session, as was the case during the first two weeks of April, they call it a "District Work Period." For those not in Congress, it is called "recess," and it provides an opportunity to focus on tasks unrelated to the Congressional schedule.

Despite the recess, the work of government continued with the SEC actively considering proposals to reinstate the uptick rule. The SEC held an open meeting on April 8, at which the Commissioners unveiled five proposals to modify or fully reinstate the rule. The proposals are now open for public comment. In the coming weeks, the OCC will be drafting a comment letter for review by the Exchanges.

In April, the Senate Banking Committee and the House Financial Services Committee have been working on legislation to establish a Commission to review the causes of the current economic crisis. Both the House and the Senate recently passed mortgage fraud legislation that includes a section to establish a Financial Markets Commission to study the causes of the current economic crisis and provide guidance on what can be done to prevent future crises. The Commission would present its full report and recommendations to Congress and the President on December 15, 2010. It is expected that this mortgage fraud legislation will be approved by Congress and sent to President Obama in the near future.

As mentioned last month, Congress is also reviewing proposals to reform the existing financial regulatory structure. It seems likely the Senate Banking Committee will hold more hearings on this issue in June and July. Chairman Dodd has been speaking to other Committee members about their priorities in an attempt to pass a bi-partisan bill out of the Committee. The House is still expected to pass their version of a regulatory reform bill by the end of July.

Finally, there is still no movement on the nomination of Gary Gensler to head the CFTC. The latest rumor is that his nomination will be considered and approved by the Senate prior to the Memorial Day recess as part of a package of nominees to be considered on the Senate floor. Until then, Senator Bernie Sanders’ hold on Mr. Gensler’s nomination remains and the CFTC does not have a Chairman.

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