Tuesday, June 29, 2010

Conference Committee Reconvenes to Deal With PAYGO and Adjourns Again

House-Senate conference on the financial reform legislation reconvened today to deal with the objection of key Republican Senators to Title XVI of the legislation, which complied with the Statutory Pay-As-You-Go Act by establishing a financial crisis assessment regime, with an attendant fund housed in Treasury. Under Title XVI, the Financial Stability Oversight Council would have imposed special assessments on a range of financial companies and hedge funds, which would have been collected by the FDIC. The assessments must collect $19 billion to pay for the legislation.

Tonight, conferees struck Title XVI from the Act and replaced it with provisions that would raise the assessment for the FDIC deposit insurance fund on banks with over $10 billion in assets and end TARP and use the unused TARP funds. Chairman Frank said that, after discussions with FDIC Chair Shelia Bair, that the increased assessment would be weighted towards financial institutions with higher leverage that pose a higher risk to financial stability. There were no revisions to any other Titles of the Act

With that the conference voted to report out the amended Act and adjourned.

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