A bipartisan group of 12 senators is seeking to exempt non-financial companies from new rules to make banking safer, breathing new life into efforts to reduce the scope of the Dodd-Frank overhaul of Wall Street.
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The plans are squarely at odds with a warning from Treasury Secretary Jack Lew, who urged the Republican-controlled House of Representatives this week not to make any changes to the broad law drawn up after the 2007-09 credit meltdown.
"These reforms should not be weakened or repealed," Lew said in a letter to Representative Jeb Hensarling, chairman of the House Committee on Financial Services, referring to a raft of bills the panel has since adopted.
Now two senators have introduced a proposal to exempt companies using derivatives to protect against losses - and not to speculate on markets - from rules that would require them to pay high safety margins.
Backed by 10 other lawmakers from both parties, the bill is identical to one of nine measures adopted by the House committee on Tuesday, but which few people thought stood a chance of passing Congress because the Senate has a Democratic majority.
The proposal by Senator Mike Johanns, a Republican from Nebraska, and Senator Jon Tester, a Montana Democrat, gives critics of the 2010 financial overhaul a shot in the arm.
"The Coalition for Derivatives End-Users, and the hundreds of businesses it represents, applauds this bipartisan legislation and looks forward to Senate action," the lobby group that is pushing for the rule change said.
Dodd-Frank aims to make the $650 trillion derivative markets less risky by putting clearing houses between buyers and sellers, forcing them to pay costly safety margins.
The two main derivatives regulators - the Commodity Futures Trading Commission and the Securities and Exchange Commission - have already made clear that end-users are exempt from clearing, and thus also from the margin requirements.
But the Senate bill would also include a rule issued by the Federal Reserve that calls on banks to impose margin requirements on all users of the most complex types of swaps, which do not need to be cleared.
The House proposal, adopted unanimously in the financial services committee on Tuesday, also has been vetted by the House Agriculture Committee.
"I'm encouraged that such a large group of bipartisan senators are joining the House's good fight to protect farmers, ranchers, and businesses from costly margin requirements," said Representative Frank Lucas, chairman of the House Agriculture Committee.
The proposal, launched on Tuesday, has been put on the Senate calendar, and it is up to the Democratic majority to decide if and when it should move forward.