- The Washington Times - Monday, February 8, 2010

SENATE

Banking rules hit impasse in Senate

Efforts to reach bipartisan agreement on regulations to prevent another financial meltdown have reached an impasse in the Senate, and the banking committee chairman, Sen. Christopher J. Dodd, said Friday he will move forward with his version of the bill.

Mr. Dodd, Connecticut Democrat, has been unable to find common ground over consumer protections with Sen. Richard C. Shelby of Alabama, the top Republican on the committee. Nonetheless, Mr. Dodd said he will incorporate provisions into the regulatory bill that were worked out by other bipartisan teams on the panel.

The breakdown in negotiations is a setback for the bill. A priority of the Obama administration, it is intended to address weaknesses in the financial system that led to the crisis that gripped Wall Street in the fall of 2008. The legislation aims to increase consumer protections on loans and credit cards, add restrictions to previously unregulated financial products and find ways to dismantle failing firms without resorting to taxpayer bailouts. The House has already passed its version.

“While I still hope that we will ultimately have a consensus package, it is time to move the process forward,” Mr. Dodd said. He is expected to introduce his bill the week of Feb. 22.

Mr. Dodd needs Republican support to win passage in the Senate. It is unclear at this point whether adding other regulatory measures supported by Republicans will guarantee him Republican votes.

Sen. Mark Warner, Virginia Democrat, said he and Sen. Bob Corker, Tennessee Republican, have found agreement on how to deal with companies that pose a broad risk to the financial system. He said Mr. Dodd assured him that their work will be reflected in legislation that Mr. Dodd proposes.

MILITARY

Military court OKs Abu Ghraib verdicts

HAGERSTOWN, Md. | The U.S. military’s highest court has upheld the convictions of two soldiers for abusing Abu Ghraib prison detainees in Iraq.

In opinions released Friday, the U.S. Court of Appeals for the Armed Forces in Washington affirmed the conviction of former Army Spc. Sabrina Harman, who helped place a hooded detainee atop a box with wires in his hands. He was told he would be electrocuted if he fell off.

Harman, of Lorton, Va., also was photographed giving a smiling “thumbs-up” beside a pyramid of naked detainees.

The court found no errors by the judge who presided over the court-martial of former Sgt. Michael Smith, an Army dog handler.

Smith, of Fort Lauderdale, Fla., was convicted of offenses that included letting his Belgian shepherd bark and lunge at prisoners for his own amusement.

SEC

Short-sale curbs under consideration

U.S. securities regulators will consider short-selling curbs in “coming weeks,” Securities and Exchange Commission Chairman Mary Schapiro said Friday.

The SEC has proposed a number of ways to curb short-selling, or investors making bearish bets on stocks.

Those proposals include market-wide curbs and so-called “circuit breakers” that would impose a restriction on short-selling if a stock fell by a certain percentage.

Miss Schapiro also said the SEC would consider proposals to consolidate some aspects of market surveillance, which is currently shared by in-house teams at trading venues and broker-dealer watchdog the Financial Industry Regulatory Authority.

SBA

Plan to expand business loans

In an effort to create more jobs, President Obama will ask Congress to temporarily expand two lending programs for the owners of small businesses, an administration official said Friday.

Speaking on the condition of anonymity because the president hadn’t yet announced the proposal, a White House official said the plan would temporarily increase the cap on Small Business Administration Express loans from the current maximum of $350,000 to $1 million.

Mr. Obama’s plan would also expand the SBA’s program to support refinancing for owner-occupied commercial real-estate loans.

To be eligible, business owners must have first mortgages and be current on all loan payments for the previous year. The White House said the proposal would help refinance up to $18.7 billion each year in commercial real estate that might otherwise be foreclosed and liquidated.

PRODUCT SAFETY

Toy firm fined over lead paint

A Massachusetts company has agreed to pay a $200,000 penalty to settle allegations it violated U.S. law when it imported Thomas and Friends, Curious George and Winnie the Pooh toys with high levels of lead.

The Consumer Product Safety Commission alleged that Schylling Associates Inc. of Rowley, Mass., imported tens of thousands of toys that violated the federal lead-paint ban and then distributed them to retail stores. These items included spinning-top toys and tin-pail toys with Thomas and Friends and Curious George graphics.

The noncompliant toys also included spinning-top toys with circus scenes and Winnie the Pooh graphics.

The consumer safety agency said Thursday that Schylling knew or should have known by 2002 that most of the toys didn’t meet the lead-paint standard and didn’t immediately tell the government about the noncompliant toys. The company reported these toys to the agency in 2007, and the agency later announced that year that the company was recalling the products.

FED

Regulators: Loan to creditworthy

Regulators are urging banks to make loans to creditworthy small businesses, a move that would support the economic recovery.

Small businesses have had an especially hard time getting loans. That has crimped their ability to expand operations and hire. Small businesses usually help drive job creation during recoveries, but credit clogs have hurt hiring.

In a joint statement Friday, regulators including the Federal Reserve, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency said that banks that engage in “prudent small-business lending after performing a comprehensive review of a borrower’s financial condition will not be subject to supervisory criticism for small-business loans made on that basis.”

Regulators said they recognize the “important role” small businesses play in the economy and the “difficulty” they are having obtaining or renewing loans.

The Obama administration does as well and has stepped up efforts on this front.

From wire dispatches and staff reports

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