The legal process for winding down a failing bank under federal control is in jeopardy, as some Senate Republicans are looking to use a workaround to chip away at pieces of the Dodd-Frank Act without needing a 60-vote majority, BloombergBNA reported yesterday. The lawmakers are targeting the “orderly liquidation fund,” which is designed to bankroll the Federal Deposit Insurance Corp. as it liquidates a failing institution. Slashing that fund would crimp the FDIC’s ability to carry out its Dodd-Frank powers. Sen. Pat Toomey (R-Pa.) is spearheading the effort, and Republican staff members are combing through the law to find other sections that could be eligible for changes through reconciliation. Republicans will have a 52-seat majority in 2017, but incoming Senate Minority Leader Chuck Schumer (D-N.Y.) has vowed to protect Dodd-Frank from GOP repeal efforts. Senate rules, however, require only a simple majority under the reconciliation process, which permits faster congressional action on tax and spending matters.
