Last Updated Dec 2, 2009 12:27 PM EST
This was expected. The bill faces a sterner test in the Senate. Among other things, the Financial Stability Improvement Act of 2009 would:
- Establish a government regulatory council, led by the Treasury Department, to regulate the financial services industry
- Authorize the Government Accountability Office to audit the Federal Reserve
- Empower the government to dissolve large financial companies in danger of failing
- Require financial secured creditors to accept up to a 20 percent "haircut" if the government bails out a financial firm
- Establish an industry-financed fund to pay for FDIC losses related to the failure of financial companies with at least $10 billion in assets
- Limit large financial companies' holdings of certain kinds of credit
- Fold the Office of Thrift Supervision into the Office of the Comptroller of the Currency
- Replace the OTS director on the FDIC's board with the Fed chairman or a Fed governor
Typically, broad bills like this one get watered down as they pass through the congressional sluice gates. And their final contents are subject to negotiations over related legislation and, of course, to lobbying efforts.
If there are roadblocks, they're in the Senate, which is considering similar legislation and where Dems have a narrower majority. If the reform package survives, House and Senate leaders would conference to create a unified measure. That's when we'll get a clearer idea of what provisions are in or out.