Legislative Updates: December 2010
Since last month's elections, people have been trying to determine the true meaning of the results. Some say it was a referendum on the Obama Administration and its overreaching policies while others claim it was a protest against the poor economy and the perceived inability of Congress to get people back to work. Then there are those who believe it showed voters' frustration toward the Democratic Party and marked a shift in America's political ideology to the right and finally the group, albeit small, that thinks there is no deeper meaning; that the better candidate just won in most of the races.
In the end, most people will read something into the election that fits their own beliefs and personality. But regardless of why, Washington is going to be a very different place during the 112th Congress, filled with a diverse group of newcomers, many of whom have never held elected office. The 90-plus freshmen Representatives and 16 freshmen Senators come to Washington with their own individual mandates and the excitement and desire to immediately contribute.
The future of the House Financial Services Committee (HFSC) and the Senate Banking Committee (SBC) is still unknown, but there have been a few developments since last month. Two of the races involving HFSC members that were too close to call have been resolved, and in both cases the incumbents, Rep. Melissa Bean (D-IL) and Dan Maffei (D-NY), were ultimately defeated. This means a total of 15 Democratic HFSC members will not be returning for the 112th Congress. HFSC Ranking Member Spencer Bachus (R-AL) has been chosen as the new chairman. In the Senate, the Chairman has not been officially announced, but it is expected to be Senator Tim Johnson (D-SD). Senator Richard Shelby (R-AL) will continue to serve as Ranking Member.
Legislative priorities of the HFSC and SBC remain in flux, but both committees will likely hold several oversight hearings on the implementation of Dodd-Frank soon after convening in January. In addition, one of the first major issues tackled by the committees will be reforming Fannie Mae and Freddie Mac. President Obama is expected to put forth his proposal to reform Fannie and Freddie in early 2011 and most observers believe that Congress will follow suit with hearings and legislation sometime in the spring.
On the regulatory front, the CFTC has its marching orders and is hard at work, having already held eight open meetings and published several proposed rules related to Dodd-Frank. Two of these open meetings took place in November, one of which dealt with portfolio margining. The SEC seems content to let them take the lead and has been more deliberate in its rulemaking process, holding only one open meeting in November and December. However, that is expected to change in the new year, with the SEC and CFTC continuing to hold hearings and gather public input as they implement the rules that they were directed by Congress to complete.
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