Maine’s two Republican senators have offered several amendments to the sweeping federal financial regulation reforms currently being considered in the U.S. Senate, in hopes of further tweaking the measure before it goes to a final vote.
U.S. Sen. Olympia Snowe offered two amendments last week that were adopted, marking them as the first Republican-sponsored proposals to win Senate approval. She plans on offering two additional amendments this week; all four proposals have sought to protect small businesses from being harmed by the overhaul package.
Snowe’s first amendment repealed the measure’s proposed requirement that banks disclose the number and dollar amount of deposit accounts of customers and the residences or business locations of each customer to a newly created federal oversight panel.
“This type of detailed reporting imposes a regulatory cost on banks and provides an extraordinarily large amount of data to the federal government,” Snowe said on the Senate floor last week. “For small community banks, every dollar spent on complying with government regulations is another dollar that cannot be used for customer service or extending credit.”
Snowe’s second amendment would allow small business owners to continue to use their homes as collateral for loans.
Snowe said a recent survey revealed that 16 percent of all small employers have mortgages on their residences that help finance their businesses. She warned that language contained in the original financial reform measure could harm small business owners that do so by potentially flagging the practice as suspicious to regulators.
“A loan to a borrower with balloon payments in June, July and August and interest-only payments for the rest of the year might look suspicious and be declared abusive, yet this is exactly how many seasonal firms in Maine and throughout the nation finance their businesses,” she said.
One of the amendments Snowe plans on offering this week would exempt certain small businesses from being regulated by the Consumer Financial Protection Bureau, a new oversight panel that would be created by the financial regulation legislation, according to John Gentzel, a spokesman in her office.
Another Snowe proposal would ensure that before that panel makes new rules, it must consider the economic impact they will impose on small firms, he said.
U.S. Sen. Susan Collins has filed five amendments so far, and though none have been adopted, one garnered praise from the Democratic senator who drafted most of the overhaul language during floor debate on Monday.
Collins spoke to colleagues about her amendment that would force large financial institutions to meet minimum capital standards that already apply to small banks.
“It only is prudent for us to empower the regulators to impose at a minimum, the same kinds of capital and leverage requirements and restrictions that apply to small insured banks,” she said on the floor. “Increasing capital requirements as firms grow provides a disincentive to their becoming too big to fail in the first place and insures an adequate capital cushion in difficult economic times.”
By directing the regulators to establish capital standards that take size and risk into account, Collins said her amendment “strengthens the economic foundation of large financial firms, increases oversight and accountability and helps prevent the excesses that contributed to a deep recession that has cost millions of Americans their jobs.”
U.S. Sen. Chris Dodd, D-Conn., is the chairman of the Senate Banking Committee who wrote the underlying overhaul bill. After Collins spoke, he said she was absolutely right and hoped their staffs could get together and make sure her idea was incorporated in the legislation.
Other amendments proposed by Collins would prohibit taxpayer funded bailouts, appoint an independent chair of the proposed Financial Stability Council, include a representative from the National Credit Union Administration on the council and include a state insurance commissioner to the council.
The Senate is expected to continue consideration of the legislation all of this week and maybe into the next.