Sen. Shelby to Unveil Legislation Heightening Fed Scrutiny

By Victoria McGrane and Ryan Tracy 

        WASHINGTON--Senate Banking Chairman Richard Shelby plans to unveil on Tuesday a wide-ranging bill that would heighten congressional scrutiny of the Federal Reserve and revamp numerous rules faced by small- and medium-size banks, according to Republican committee aides.
        The draft legislation, which Republicans described as a starting point for further negotiations, represents the most ambitious attempt to revamp the financial regulatory regime since the 2010 Dodd-Frank Act, yet seeks to avoid the most deeply divisive issues surrounding that law.
        Many of the bill's provisions were drawn directly from House and Senate bills that garnered bipartisan support and, in some cases, were written by Democrats on the Senate Banking panel. But it also contains elements that are likely to prompt opposition from Democrats, whose support will be needed to move a bill through the Senate. Among the potentially controversial pieces are a legal "safe harbor" for banks of any size from federal mortgage underwriting standards, proposals to alter the process for determining which banks and other financial firms qualify for stricter regulation and oversight, and some provisions related to mortgage-finance companies Fannie Mae and Freddie Mac.
        Mr. Shelby plans to release an eight-section, 216-page draft bill around noon Tuesday that is "intended to initiate a discussion with members of the Committee who are interested in drafting a bipartisan bill," said one Republican aide. Mr. Shelby's office is open to modifying the legislation or striking provisions ahead of a May 21 committee vote Mr. Shelby has scheduled, according to the GOP aides.
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        (END) Dow Jones Newswires

        May 11, 2015 21:10 ET (01:10 GMT)

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