Senate delayed on Wall Street reform

By Jennifer Liberto, senior writer, and Ted Barrett, CNN congressional producer


WASHINGTON (CNNMoney.com) -- Senate Democrats failed to muster enough votes Monday to take up Wall Street reform, with a key Democrat voting with Republicans against the push to get the debate started.

Sen. Ben Nelson, D-Neb., voted against a proposal to officially start debating the Wall Street reform legislation before other lawmakers on a Senate Banking panel negotiate a deal.

That move made it impossible for Democrats to get 60 votes to push the legislation forward.

The official vote was 57-41 in favor of moving forward. Senate Majority Leader Harry Reid, D-Nev., switched his vote from "yes" to "no," in a procedural move that allows him, under the Senate rules, to bring the bill up again for another vote.

Reid said Tuesday he would schedule another vote for later in the day, but there was not expected to be any change in the result.

Two GOP senators, Christopher Bond of Missouri and Robert Bennett of Utah, did not vote.

Nelson told CNN that he worried about the legislation's impact on Main Street and that he didn't want to push forward a bill that isn't finalized.

"This has an awful lot of unintended consequences," Nelson said. "I don't think everyone is aware of the unintended consequences."

His vote signals that Democrats have a ways to go in negotiating a deal with Republicans before a final bill can pass.

The White House issued a statement from President Obama expressing his disappointment in the vote and urging the Senate to "get back to work and put the interests of the country ahead of the party."

Democrats and Republicans still disagree about the way to go about preventing future bailouts, cracking down on risky bets and ensuring consumers have stronger protection.

Sen. Richard Shelby, R-Ala., the ranking member on the banking panel, met again Monday with Sen. Christopher Dodd, D-Conn., who runs the banking panel. But the two remain far apart on key details, and, according to Republican congressional staff aides, their staffs have not met since Thursday to hash out differences on paper.

"My goal and Sen. Dodd's goal is to get a bill first in principle, and then there's a lot of work to be done, working together," Shelby said.

Shelby added that he'd like to get a bill completed "this week or next," or "as soon as we can." But Shelby and Dodd have been talking over many of the same issues for months.

Here are the issues still in play:

Too big to fail

Democrats want to create a council of regulators who keep an extra eye on firms whose failure would threatens the economy. They also want to empower the Federal Deposit Insurance Corp. to step in and take down big Wall Street banks, tapping a pot of money that banks pay into.

But Republicans say that the new unwinding powers and the resolution fund will create a new implicit guarantee of future government intervention.

Shelby said on Sunday that the bill leaves too much flexibility for the Federal Reserve and the FDIC.

"We need to tighten that up to make sure that it doesn't happen," Shelby said on NBC's "Meet the Press." "The message should be unambiguously that nothing is too big to fail and if you fail, we're going to put you to sleep."

Risky bets

Congress wants to make bets on complex financial contracts known as derivatives more transparent, pushing them onto clearinghouses and exchanges. They also want those making bets to post collateral, backing up the bets.

On Monday, key Democrats agreed to new rules to force banks to spin off their swaps desk, or the parts that deal in making such risky bets.

However, the financial services sector says too much regulation will hurt U.S. businesses, such as airlines and farmers, who benefit from making such bets to shed the risk of swings in prices and interest rates. And they say it will push the industry to make trades overseas.

Shelby said on Monday he had heard the terms of the deal, but declined to say whether he'd support it.

Consumer protection

Democrats want to create a new independent consumer financial protection regulator. The Senate measure houses the regulator inside the Fed but gives it strong powers to make its own rules, such as capping credit card fees and fees for paying down mortgages early. New rules can get vetoed by a council of regulators. The House bill, which passed last December, goes further with a stand-alone agency.

But Republicans think the consumer regulators' power goes too far, regulates too many financial products and could cut so deeply into banks' balance sheets, that banks could become unstable and insolvent.

-- CNN's Dana Bash contributed to this report. To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 16,408.54 -16.31 -0.10%
Nasdaq 4,095.52 9.29 0.23%
S&P 500 1,864.85 2.54 0.14%
Treasuries 2.72 0.08 3.19%
Data as of 3:17pm ET
Company Price Change % Change
Bank of America Corp... 16.15 0.00 0.00%
Facebook Inc 58.94 0.00 0.00%
General Electric Co 26.56 0.00 0.00%
Cisco Systems Inc 23.19 -0.02 -0.09%
Micron Technology In... 23.91 0.00 0.00%
Data as of Apr 17
Sponsors

Sections

GM won't have to tell customers to keep their recalled cars parked until fixed, after a federal judge denied emergency motion Thursday. More

Obamacare sign ups hit 8 million, though final enrollment remains to be seen. More

Office for iPad move is a symbolic victory for Nadella's Microsoft, but the company is still weighed down by many of the same old issues. More

Schwinn, Trek and Cannondale are all iconic American bicycle brands. But none of them are made in the United States. More

As Detroit moves closer to reaching a bankruptcy deal, retired civilian workers are poised to be left worse off than firemen and police officers. More

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.