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The derivatives chapter in the Senate's financial reform bill is stronger than the House's version in just about every way imaginable. Not surprisingly, convincing finical reform conference committee members to choose the House derivatives language over the Senate language has been big-bank lobbyists' top priority in the past few weeks.

The vote on derivatives will take place tomorrow, and despite a lot of centrists recently adopting the banks' position, a trio of relatively moderate House Dems -- Rep. Rosa DeLauro [D, CT-3] (pictured), Rep. Bart Stupak [D, MI-1] and Rep. Jackie Speier [D, CA-12] -- are pushing back hard. They circulated a letter today urging the Senate derivatives language to be kept in tact and implying that any actions by the conference committee to weaken the language could cost Democratic votes from the left. They are asking for Democratic House colleagues to sign on.

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In the House, derivatives reform was gutted by a loophole that allows any bank to declare themselves a "swap execution facility" and simply make a trade over the phone. Now, the derivatives reform section in the Senate financial reform bill, which is generally considered one of the bill's toughest sections, is at risk of being rendered useless by its own loophole. This one would let banks dodge new clearing requirements without any negative consequences, even if they have been told by regulators that they must conduct their trade through a clearinghouse.

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