The agreement abandons a $50 billion resolution fund that would have covered the costs of a major financial collapse. Instead, if the amendment is adopted, as expected, the Federal Deposit Insurance Corporation would have the ability to liquidate large firms, and could likely use a credit line from the Treasury Department to cover any costs. Any losses the FDIC encounters would be recovered as the agency sells off the assets of the failed firm.
Shelby's near-total victory on the bailout issues is worth emphasizing because the politics were so stacked against the Senate GOP that even some conservatives started wondering why they were filibustering and holding out for so long, especially after Reid started opportunistically forcing vote after vote. It's because the bailout provisions of the bill were really bad — you can catch up here — and thanks to senators such as McConnell, Shelby and Corker who wouldn't let go of this issue, those provisions are now much improved. Liberals who tried to spin it all as an evil Frank Luntz talking-point conspiracy have reason to feel a little bit foolish today. Dodd was willing to let the administration have the flexibility it wanted to do bailouts until Republicans filibustered the bill. Dodd caved, and the fixes were approved 93-5.
Notwithstanding any other provision of law, the Board of Governors shall publish on its website, not later than December 1, 2010, with respect to all loans and other financial assistance it has provided during the period beginning on December 1, 2007 and ending on the date of enactment of this Act under the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility, the Term Asset-Backed Securities Loan Facility, the Primary Dealer Credit Facility, the Commercial Paper Funding Facility, the Term Securities Lending Facility, the Term Auction Facility, Maiden Lane, Maiden Lane II, Maiden Lane III, the agency Mortgage-Backed Securities program, foreign currency liquidity swap lines, and any other program created as a result of the third undesignated paragraph of section 13 of the Federal Reserve Act.