As has been expected for several months now, the House of Representatives has passed H.R. 4173, the Wall Street Reform and Consumer Protection Act of 2009 (the "Bill"). Although the talk of creation of a "Consumer Financial Protection Agency" has garnered the most attention for the past several months, the Bill also seeks to institute comprehensive mortgage reforms, prohibit "perverse" corporate pay practices, put an end to "too big to fail" financial firms and enhance the SEC's enforcement powers. Other provisions in the Bill include the creation of a Federal Insurance Office, creation of a Financial Stability Council, reformation of credit rating agencies, regulation of hedge funds, merger of the Office of Thrift Supervision into the Office of the Comptroller of the Currency and regulation of the over-the counter derivatives market. In sum, the Bill, if passed into law, would amount to a massive governmental overhaul of America's private financial system.

The Bill now proceeds to the Senate. Senator Dodd has already circulated a facially-similar discussion draft, tentatively titled "Restoring American Financial Stability Act of 2009." This draft bill is in the Senate Banking Committee, and varies from the above Bill in a number of critical ways. For example, rather than creating a Financial Stability Council, Dodd's draft bill establishes a similarly-named "Agency for Financial Stability," with likewise similar but not identical regulatory authority. Likewise, the Dodd version establishes an umbrella agency, the "Financial Institutions Regulatory Administration," which would assume most of the current supervisory powers of the Federal Reserve, the OCC, the OTS and the FDIC. The Dodd bill would also prohibit the chartering of new federal savings associations while grandfathering existing charters.

We will monitor the progress of the two versions of the financial regulatory reform bills and report to you the status of these bills as they occur.

A summary of the Bill is attached. A copy of the Bill can be found by clicking here or by going to the House Financial Services Committee website at http://financialservices.house.gov.