While the Senate infamously passed one deregulatory measure sneaked into the year-end spending bill, it scuppered another.
The Terrorism Risk Insurance Act died in the upper chamber before the holiday recess started Tuesday . With it went down a measure that would forbid regulators from imposing “margin requirements” on “non-financial” corporations–rules, in layman’s terms, that force non-banks to put up collateral when dealing with banks.
But Senate Democrats have a Republican to thank for sparing them possible blushes. Sen. Tom Coburn (R-Okla.) refused to grant unanimous consent to the bill, as the clock ran out on a chance to pass it through normal procedure. The move caused Wednesday afternoon finger-pointing on Twitter and raised the possibility that Senate Democrats might have mimicked their House colleagues by unanimously approving of the deregulatory measure, if not for Sen. Coburn’s intervention.
“Disappointed Senate Democrats chose to prioritize controversial nominations over bipartisan, House-passed #TRIA bill,” Speaker of the House John Boehner (R-Ohio) tweeted around noon.
“.@SpeakerBoehner, we are disappointed that House GOP chose to introduce a stand-alone TRIA bill, knowing a Senate Republican would block it,” Sen. Charles Schumer (D-N.Y.), a supporter of the bill responded, referring to TRIA’s exclusion from the so-called Cromnibus. The controversial spending package included a measure that would allow Wall Street banks to finance derivatives trades with savings backed by the federal government
In a statement released after TRIA failed to pass, Schumer blasted House Financial Services Committee chair Jeb Hensarling (R-Texas) and Boehner for including the margin requirements provision. But, he said, “Sen. Coburn struck the final blow when he objected to bringing the bill to the floor.”
While it might have passed without the senator’s hold, one Democratic Senate aide told The Hill that the inclusion of the Wall Street deregulation was the deciding factor–mostly in that it kept TRIA out of the already-deregulatory Cromnibus. A previous version of the bill without the measure passed the Senate by a vote of 93-4 in July.
Sen. Coburn’s concerns about the bill, according to the Wall Street Journal, had nothing to do with margin requirements. They centered around “a provision establishing an independent national board making it easier for insurance agents and brokers to operate across state lines.” Coburn said, according to the paper, that the board would violate “the 10th Amendment right of every state to control their own insurance agents and brokers.”
Public Citizen financial policy advocate Bart Naylor told The Sentinel last week that the a margin requirements repeal “paves the way for the emergence of a future problem” and that “alert regulators would appeal to Congress” to refrain from fettering their power.
