Memo lays out Senate Banking Committee agenda

On Dodd-Frank, the committee will focus on ensuring that regulators are implementing the letter and spirit of the law, the public can comment on new rules, the law is being enforced, and “legitimate concerns” about the law are considered.

It appears the committee will also be checking to make sure that financial regulators have enough funds to implement the law, and that those funds are being used efficiently. Johnson’s indication that the Senate Banking Committee will seek to assure regulators have sufficient resources may put the upper chamber’s panel at odds with its House counterpart.

A budget standoff in the previous Congress has left financial regulators like the Securities and Exchange Commission (SEC) working with budgets at pre-Dodd-Frank levels.

The agencies are asking for hundreds of millions in new funds to handle their new responsibilities, and SEC Chairman Mary Schapiro warned Friday that the agency’s budget crunch was endangering its work. House Republicans, who opposed the Wall Street reform law, have indicated they are not interested in authorizing those new funds as they try to cut government spending.

House Financial Services Committee Chairman Spencer Bachus (R-Ala.) last month named a laundry list of the SEC’s failings, including missing the fraud of Bernie Madoff, and suggested the SEC had not been effective with the funds it had been given before asking for more.

SEC funding is listed as a subject that will likely require “significant oversight” in Johnson’s document.

The committee will also monitor the establishment of the new Consumer Financial Protection Bureau (CFPB) created by the law, which opens its doors in July.

Another Dodd-Frank provision that may attract the committee’s attention will be new limitations placed on the fees banks can charge merchants for swiping their debit cards. The Federal Reserve, as mandated by the law, has proposed rules limiting such “interchange fees,” and the subject remains a contentious battle between big banks and big retailers, with billions of dollars in revenue hanging in the balance.

On the housing front, the committee will “start the process of examining the numerous questions arising from the need to restructure the housing finance system,” including Fannie Mae and Freddie Mac.

While that debate is expected to be a lengthy and involved one, Johnson’s memo indicates the committee will focus on ensuring affordable 30-year fixed-rate mortgages remain available, that all borrowers and market segments can maintain access to the mainstream housing finance system, and that mortgage markets remain stable, liquid and efficient for both single and multi-family housing.

The committee will also look for ways to improve mortgage servicing procedures, including helping homeowners modify their loans to make them more affordable.

While the Treasury Department continues to wind down programs tied to the Troubled Asset Relief Program (TARP), Johnson wants the banking panel to continue playing an active oversight role. Hearings where lawmakers receive input from Treasury officials, the special inspector general charged with monitoring TARP, and officials from the Federal Reserve may be in the works.

The memo goes on to list several other areas where the panel might dabble in the 112th, including consumer financial products, financial data security, public transportation and infrastructure, and various trade issues.

Johnson’s memo also details the various nominations the committee will have to consider over the next two years, including the first director of the CFPB.

Notably missing from that list is the administration’s nominee to head the Federal Housing Finance Agency (FHFA), which oversees Fannie and Freddie. In the last Congress, the panel approved Joseph Smith Jr., but the full Senate failed to act on the pick.

Last month, Smith asked the administration not to re-nominate him for the position in the new Congress, as he opted to stay at his current position as the North Carolina Commissioner of Banks.

In Johnson’s memo, it simply says “no nominations currently anticipated” for the position of FHFA director.