After weeks of debate on the various legislative pieces of a large-scale financial regulatory overhaul, the House Financial Services Committee was expected to complete its work this week.  However, a committee vote to approve the final piece of the overhaul – the systemic risk bill (H.R. 3996) – was postponed Thursday when Members of the Congressional Black Caucus (CBC) withheld their support for the measure.

While the 10 CBC Members on the Financial Services Committee do not have specific objections to the underlying systemic risk bill, they decided to withhold support in order to voice their discontent over the Obama Administration’s handling of the current economic crisis.  CBC Members have been meeting with Administration officials to discuss their concerns, and Financial Services Chairman Barney Frank (D-MA) expects his committee to vote on H.R. 3996 on December 1.

In related news, the Financial Services Committee voted to add a Federal Reserve auditing provision to H.R. 3996 on November 19, despite strong opposition from the Fed.  The amendment – offered by Rep. Ron Paul (R-TX) – would broaden the authority of the Government Accountability Office (GAO) to examine and audit the Fed.  It was adopted by a bipartisan vote of 43-26, despite the central bank’s strong concern that such audits could lead to the belief that its monetary policy decisions would be subject to political interference.

We will continue to monitor this important issue as it makes its way through the legislative process, and will provide updates on InsureReinsure.com.