By Michelle Price and Pete Schroeder
WASHINGTON (Reuters) – Buoyed by the U.S. Congress passing legislation on Tuesday easing rules on banks, some business groups hope lawmakers will move quickly to change other financial rules they say are hurting Main Street businesses.
But with Democrats still smarting from the battle over the rewrite of the 2010 Dodd-Frank financial reform law and mid-term elections on the horizon in November, getting another de-regulation package across the line will be tough, said lobbyists and Congressional sources.
“I don’t think it is likely that the Senate will have the time or bipartisan support to move another financial services bill,” said Dina Ellis Rochkind of the New York law firm Paul Hastings LLP who helped draft the 2012 JOBS Act helping start-up businesses.
On Tuesday, the U.S. House of Representatives passed an earlier Senate bill reforming the Dodd-Frank rules after the Senate leadership promised to consider additional measures to help start-ups and listed companies.
The compromise has raised hopes among business groups that the moderate Senate Democrats who backed Tuesday’s legislation may support a securities law package that would include capital markets bills already passed by the House.
The U.S. Chamber of Commerce, the Nasdaq stock exchange operator <NDAQ.O>, and the Securities Industry and Financial Markets Association, say changes are urgently needed to counter a 50 percent decline in the number of listed firms over the past two decades.
Testifying before the House on Wednesday, they pushed a raft of measures to lighten the reporting, disclosure and corporate governance requirements for small companies.
They have also advocated rule-easing that could chip away at the Chinese wall designed to prevent analysts from writing favorable research about companies in order to help investment banker colleagues win business.
Speaking to Reuters on Wednesday, spokespeople for the Chamber of Commerce and Nasdaq said they believed Democrats may support changes because securities markets reforms have historically been a bipartisan issue.
“We don’t see this as controversial, we think these are fairly technical and incremental changes,” said Nasdaq general counsel Ed Knight, adding he was hopeful of a deal this year although it was unclear what legislative path it would take.
But the intense fight over the Dodd-Frank law reform, which saw some senators including Elizabeth Warren publicly attack their fellow Democrats, may deter moderate Democrats from revisiting financial rules before the midterm elections, sources said.
At least eight Democrats would need to join with Republicans for the Senate to pass another package.
Senator Heidi Heitkamp, a Democratic sponsor of the Dodd-Frank rewrite, told Reuters on Tuesday she had not committed to support further rule-easing but that there may be some provisions she would be willing to advance.
Senator Joe Donnelly, another Democratic sponsor, is open to considering additional bills, according to his spokesperson.
Lobbyists for capital markets reforms are also racing against time, with the Senate calendar already full of hearings that could crowd out debate on a securities bill before re-election campaigning begins in the fall.
If lawmakers fail to consider a standalone package, Ellis Rochkind said there could be opportunities for lawmakers to include the House’s capital markets bills in other must-pass legislation, such as those on Flood Insurance or appropriations.
“The bills are incremental but when looked at together make meaningful changes,” she added.
(Reporting by Michelle Price and Pete Schroeder; editing by Clive McKeef)