Where Financial Reform Stands After Failed Test Vote

Dems aren't as bullish as earlier in the week

On Monday, Senate Majority Leader Harry Reid scheduled a key test vote for Wednesday that, if successful, could have paved the way for financial regulatory reform. But the vote failed, leaving uncertain prospects for the measure. Key Democrats insisted that they need more time to introduce, debate, and vote on amendments to the bill. Is that pause a god or bad thing for reform? Here's where reform stands today.

• Senate Should Take Its Time The Washington Post's Ezra Klein advises, "The request is that the amendment process to be given a little bit longer to play out, at least until the really major amendments -- like restoring Glass-Steagall and putting the Volcker rule into place -- are off the table. We're still suffering from the aftereffects of a brutal financial crisis that was, at least partially, the result of the Senate's inattention to financial regulation. So if the Senate needs another week or two to get the regulatory response closer to right, then it should take that time."

• Amendments Could Shatter Coalition The Atlantic's Daniel Indiviglio suspects "that the Democratic leadership fears that some of the amendments will actually will pass. The Cantwell amendment, in particular, is co-sponsored by Sen. John McCain (R-AZ). If it really has bipartisan support, then it could succeed. That prospect might frighten moderate Democrats, who think breaking up the banks would take things too far."

• Sen. Scott Brown Jumps On Board Talking Points Memo's Brian Beutler reports that, during the stall, one Republican Senator has suggested he will join with Democrats. "Sen. Scott Brown acknowledged tonight that he did indeed tell Majority Leader Harry Reid he'd support financial reform legislation, before voting to filibuster at the last minute. But he says he's confident he'll ultimately side with the Democrats, and suggested he may switch his vote back to yes as early as tomorrow."

• Treasury and Fed Working Against Key Provisions The Wall Street Journal Damian Paletta reports on the lobbying effort underway as the Senate waits. "Officials from the Treasury Department, Federal Reserve and Wall Street are working to kill an amendment to the Senate's financial regulations bill that was adopted unanimously last week and that could force big U.S. banks to hold billions of dollars in additional capital."

• ATM Fees Debate Is a Red Herring The Seattle Times laments the current Senate debate over ATM fees. "American taxpayers - always on the hook for the bill - will not be any safer until commercial and investment banking functions are separated, and banks are rigorously regulated. Debates over ATM fees do not get that done."