House, Senate Democrats drop fee from bank bill

WASHINGTON — Top Democratic House and Senate negotiators who worked out a deal on a sweeping overhaul of financial regulations regrouped Tuesday to eliminate a $19 billion fee on banks that had threatened to derail the legislation.

Eager to salvage one of President Barack Obama's legislative priorities, lawmakers replaced the banks fee with budget adjustments involving the $700 billion bank bailout and increased premiums on bank deposit insurance.

The bill's fate was thrown into doubt this week following the death of Sen. Robert Byrd, D-W.Va., and after Republican Sen. Scott Brown of Massachusetts vowed to abandon his support for the bill if it retained the assessment on large banks and hedge funds. The money would be used to pay for the costs of the legislation.

Uncertainty surrounding the bill raised doubts about Congress' ability to complete it this week — a target of both the White House and Democratic leaders. The House still was expected to vote on the bill today, but the Senate likely would take up the bill in two weeks following a recess.

The legislation would rewrite financial regulations by putting new limits on bank activities, creating an independent consumer protection bureau and adding new rules for largely unregulated financial instruments.

Besides Brown, Republican Sens. Olympia Snowe and Susan Collins of Maine, both of whom also voted for the Senate bill last month, said they, too, had qualms about the bank assessment that negotiators inserted into the bill last week.

Without Byrd's vote, the support of the three Republicans would be crucial to overcome 60-vote procedural hurdles that could defeat the legislation.

Share This Story