Financial regulation overhaul
Major elements of the bill being worked on by the House Financial Services Committee:
■ Derivatives: The bill more tightly regulates derivatives trading, but provides exemptions for certain corporate dealings. Passed committee.
■ Credit rating agencies: Requires more disclosure from credit rating firms and makes it easier for investors to sue for flawed ratings. Passed committee.
■ Hedge funds: Forces hedge fund advisers to register with the Securities and Exchange Commission and puts them under more oversight. Passed committee.
■ Consumer protection: Creates a Consumer Financial Protection Agency to regulate loans, credit cards, and mortgages, with some exemptions for small banks and retailers. Passed committee.
■ Resolution authority: Establishes rules for shutting down big financial institutions in an orderly fashion; sets up mechanism to levy charges on the financial industry to pay for any future bailouts. Committee vote expected as soon as next week.
■ Systemic risk regulator: Gives the Federal Reserve and a newly created government council more power to act as “systemic risk’’ regulators, with far-reaching authority to prevent risky practices across the economy. Committee vote expected as soon as next week.
