During this past week's Senate floor debate on the Restoring American Financial Stability Act of 2010 (S.3217), Democrats and Republicans made brief progress, passing a total of seven amendments and rejecting three. The following amendments were agreed to by roll-call vote:

  • Amendment No. 3737, sponsored by Senator Barbara Boxer (D-CA) and passing 96-1, provides that all financial companies put into receivership "shall be liquidated" and that "[n]o taxpayer funds shall be used to prevent the liquidation of any financial company."
  • Amendment No. 3827, co-sponsored by Senate Banking Committee Chairman Christopher Dodd (D-CT) and Ranking Member Richard Shelby (R-AL) and passing 93-5, provides, among other things, for the deletion of the proposed $50 billion resolution fund, which had continuously drawn considerable Republican criticism, possible claw-back on the compensation of senior executives and directors "substantially responsible" for the failure of liquidated institutions, and places limits on the Federal Reserve's use of its Section 13(3) emergency lending authority.
  • Amendment No. 3749, sponsored by Senator Jon Tester (D-MT) and passing 98-0, revises the new assessment base for insured depository intuitions, "so that larger and riskier banks pay an appropriate amount."

Notably, the Senate rejected, by a 38-61 vote, an amendment sponsored by Senator Shelby that would have relocated the proposed Consumer Financial Protection Bureau from the Federal Reserve to the Federal Deposit Insurance Corporation. Senate Banking Committee Chairman Dodd critiqued Senator Shelby's amendment as "backwards," asserting that it would "cripple consumer protection." A particularly controversial amendment proposed by Senator Bernie Sanders (I-VT) and expected to be taken up next week, would provide for GAO audits of Federal Reserve monetary policy deliberations and operations. Both Federal Reserve Chairman Ben Bernanke and former Federal Reserve Chairman Paul Volcker expressed concern with the amendment, Chairman Bernanke stating that it "would seriously threaten monetary policy independence, increase inflation fears and market interest rates, and damage economic stability and job creation."

Alston & Bird has issued a Financial Services and Products Advisory on this past week's Senate debate.