Reform

The idea is to try and limit the way banks can play with assets and how much they can be exposed to the stock market and complex market financial investments. Its an attempt to bring back a few aspects of the Glass–Steagall Act of 1933.

McClatchy: Lawmakers move to curb risky trading by commercial banks

Under the compromise first announced Thursday by Sen. Christopher Dodd, D-Conn., the chairman of the Banking Committee, deposit-taking commercial banks could still invest in hedge funds and private equity funds, but their participation in these high-risk funds would be limited. Banks could own no more than 3 percent of such funds, and the investment couldn't exceed 3 percent of the bank's capital.


In a blow to consumer advocates, lawmakers agreed that auto dealers who offer financing to customers should be exempt from direct regulation by a new Bureau of Consumer Financial Protection. The Pentagon took the unusual step of writing letters to negotiators calling for tougher regulation of auto lending, citing predatory lending practices aimed at members of the armed services.


In another point of negotiation, senators pared back a House proposal that would have provided $3 billion, through the Department of Housing and Urban Development, to help unemployed homeowners with good payment histories to stay in their homes. The Senate negotiators counter-offered with $1 billion. House members were to respond overnight.