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Legislative Updates: October 2010


Capitol Call

In September, Congress reconvened and was expected to consider many important legislative initiatives including the federal budget and expiring tax provisions. Following the long August recess there were many competing items to be considered.

While several largely symbolic votes were held, there was insufficient support to approve any substantive legislation. Both parties accused the other of political malfeasance as members began leaving Washington and returning to their districts to campaign for re-election. In the end, Congress approved a short-term continuing resolution (CR) that will fund the federal government until early December. As a result, many of the tough issues Congress still has to face (the expiring Bush tax cuts, etc.) will have to be resolved in a lame duck session later this year, after the November elections when the political dynamic will undoubtedly be very different.

On the House side, the House Financial Services Committee held a hearing on reforming the Securities Investor Protection Act on September 23rd. The witnesses provided recommendations on how to improve the SIPC insurance program and make it easier to protect consumers who invest in securities.

At the end of the month, the Senate Banking Committee held a hearing on the implementation of the Dodd-Frank law with several important regulators, including Federal Reserve Chairman Ben Bernanke, Federal Deposit Insurance Commission (FDIC) Chairman Sheila Bair, Securities and Exchange Commission (SEC) Chairman Mary Schapiro, and Commodity Futures Trading Commission (CFTC) Chairman Gary Gensler testifying about their regulatory actions. Since it was likely to be the last hearing chaired by Chairman Chris Dodd (D-CT), many felt that he held it as a progress report on his namesake bill and a chance for the regulators to say goodbye to him before he bows out at the end of this Congress.

On the regulatory front, the CFTC and SEC held a two-day joint Roundtable on September 14 and 15 on several rules that they expect to consider related to swap data repositories, swap execution facilities and security-based swap execution facilities. The comprehensive format permitted CFTC and SEC staff to question witnesses about these three provisions in the Dodd-Frank law. It is expected that the CFTC and SEC will conduct additional joint Roundtables this fall as well as hold Open Meetings to approve various rulemakings related to the Dodd-Frank law.

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