Washington (CNN) – The Democratic lawmaker taking the lead in crafting the Senate’s financial regulatory reform bill has agreed to a key change that would limit taxpayers’ exposure if the government must step in to wind down a large, failing financial institution, a key House Democrat said Thursday.
Rep. Brad Sherman, D-California, who sits on the House Financial Services Committee, told CNN that Sen. Chris Dodd, chairman of the Senate Banking Committee, has agreed to change a provision in the Senate bill to limit the Federal Deposit Insurance Corporation to borrowing no more than 90 percent of the value of the assets of a failing firm.
“The senator has agreed to changes that would prevent borrowing by the FDIC that could have been enormous,” Sherman said on CNN’s John King, USA.
With the change, explained Sherman, “when [the FDIC] takes over a defunct entity, they’ll only be able to borrow 90 percent of the value of the assets they’ve taken over so that they have the liquidity to wind that entity up.”
Sherman told CNN Chief National Correspondent John King that the change was “considerably different” from how the bill currently operates.
King quickly sought to clarify: The FDIC “cannot use more taxpayers’ money than that firm is worth? So that if it had to sell the whole thing the day after tomorrow, the taxpayers would not lose a dime?”
“Exactly,” replied Sherman. “Now there will be money collected in advance from Wall Street, but that’s Wall Street’s money. That’s not taxpayer money.”
The change could serve to neutralize one of the key sticking points for Senate Republicans who are opposed to the current version of the Senate bill because they believe it creates the possibility of limitless taxpayer-funded bailouts.
What a joke-- DODD?????????????
I am belive that demorcratic are wrong cause obama are keep out of dangerous just he like looking play game
What concessions did the Democrats get in return? Do they have a Republican vote for making this change?
That's what they did with HCR, they kept adding Republican ideas in exchange for nothing. They need to get a promise for each idea they add.
I don't like the thought of Dodd "tweaking" anything. His "tweaking" of Fanny/Freddie got us in the mess we are in. How come he's still out of prison?
Don't talk economics with us Democrats not while the last lady in the U.S. has to have 22 aides to serve her. Who does she think she is. OPRAH.
One criminal fine tuning a criminal plan? Guess that makes sense?
LIsten to the republicans. They actualy have some good ideas.
Chris Dodd is one of the people that has abused the system more than those that now want us to believe that the system needs changes to prevent what happened in the past from happening again.Beam me up Scotty,it's happening again !!!
Regulate, regulate, regulate....these banks/wall street/corporations need to be regulated. The above three almost took our country down due to their greed.
Dodd is the problem and not the solution.Please do not let him around financial reform,like putting a fox watching the chicken coop.
Let us pray that he doesn't tweak it like he did to Fannie Mae and Freddie Mac...When is he suppose to report to jail?
And this is why I vote for this man for Congress. Go Brad Go!
The Dems are Cheats and Liars....
Need Proof Here it is....
GM pays back 6.7 of bailout money...
Yes they did out of another pool of 6.7 bailout money....
The congress is a bunch of liars...
First they steal and nationalize GM...now they are lying about paying it back... ALL LIARS.
Dodd on Wall Street: A Crook among Crooks