House-Senate Conference Committee

The conference committee is working on a compromise bill of financial regulatory reform, consolidating the two very different bills that have passed the two chambers of our Congress recently.

The weekend edition of the Wall Street Journal portrrays the deliberations as tiring and tiresome. "After just four days, House Democrats and Republicans appear exhausted. Some have abandoned their jackets. When their Senate colleagues filter in, they sit across the table and stare at their House counterparts like children visiting the zoo."

One of the many issues that it is their duty to discuss is whether brokers are to have a fiduciary obligation toward their customers -- and, oif so, toward which customers. The House negotiators want to order the Securities and Exchange Commission to impose the standard, in the limited set of cases in which brokers offer “personalized investment advice about securities to a retail customer.” They would give the SEC the choiuce whether to extend that obligation to other customers.

Bloomberg's account portrays this as a make-or-break issue from the POV of the House negotiators, quoting Rep. Barney Frank (D-Mass.) “I cannot foresee us giving in on fiduciary responsibility for individual investors.”

Bloomberg also said, in a story on June 16, that Dodd was about to propose a counter-offer some day soon, to the latest House conferees' language on this point. I'm not aware that he has done so yet.

Rich Blake is predicting, with tongue in cheek (I think), that: "Financial reform will pass on Friday July 2, the last news day prior to the long Fourth of July weekend, with Obama, flanked by Senator Chris Dodd and a Republican, possibly Richard Shelby of Alabama, announcing 'America’s independence from Wall Street.'"