A joint conference committee is merging Wall Street reform bills from the Senate and the House of Representatives to reach a final version of historic financial regulation legislation.
The final product could differ from the bills already passed. Once finalized, it would have to be approved again by both chambers then sent to President Barack Obama to be signed into law. Lawmakers hope to deliver a bill to Obama by July 4.
Below is a look at where key points of contention have been resolved, and where big disagreements remain:
Lawmakers agreed to widen audits of the Federal Reserve to include regular discount window lending and to exclude monetary policy. They also agreed to drop a provision to make the head of the New York Federal Reserve Bank a political appointee.
CREDIT RATING AGENCIES
Investors could sue credit rating agencies that recklessly failed to review key information in developing a rating, under language agreed to by lawmakers.
The standard would make it easier for investors to sue. Lawmakers rejected a House attempt to make it harder to sue.
Lawmakers agreed to require the Securities and Exchange Commission to address conflicts of interests at rating agencies and mandated that a new board proposed by Democratic Senator Al Franken be implemented if the regulator does not develop an alternative after a two-year study of the issue.
REGULATING PRIVATE POOLS OF CAPITAL
The committee agreed to require hedge funds and private equity funds to register with the government and open up to more scrutiny.
The House and Senate have agreed hedge funds and private equity funds with more than $150 million in assets must register with the Securities and Exchange Commission.
The committee also agreed to exempt venture capital funds from full registration.
TO BE RESOLVED:
FINANCING 'ORDERLY LIQUIDATION'
Both bills set up a new government process for seizing large financial firms in distress and liquidating them.
The Senate would cover the costs from sales of the liquidated firms' assets and, in case of shortfalls, fees on other firms. The House would set up a $150 billion fund paid into in advance of any actions by large firms.
Banks do not want to pay any fees up front.
Both bills create a government watchdog for consumers to regulate mortgages and credit cards. The Senate puts the watchdog inside the Federal Reserve, while the House makes it an independent agency.
Most industry lobbyists and Republicans bitterly oppose the watchdog proposal, no matter where it is housed. They will push to block an independent agency, carve out exemptions for a range of businesses and restrict its powers.
A related issue is how much power state authorities have over banks. Industry will push for more state constraints.
The Senate bill endorses this Obama administration proposal to ban risky trading by banks that is unrelated to customers' needs. But the bill leans on regulators to write the details and leaves the door open to weakening the rule down the road.
The Volcker rule is not in the House bill, although it would let regulators bar proprietary trading in cases where it threatens the stability of the financial system. Some form of the rule is expected to be in the final measure. Banks will push to kill it or water it down.
Both bills seek to redirect as much of the $615 trillion over-the-counter derivatives market as possible through more accountable channels such as exchanges and clearing houses.
The Senate bill goes a big step further and requires banks to spin off their swaps-trading units. Banks whose profits would be hurt oppose this. So do some regulators. The White House has made clear it does not view the provision as a high priority.
Wall Street firms that dominate the market -- Goldman Sachs ,JPMorgan Chase ,Citigroup ,Bank of America ,Morgan Stanley and Wells Fargo -- are lobbying hard against changing the rules.
INCREASED CAPITAL REQUIREMENTS
Both bills call for higher capital requirements on banks and financial firms as they get bigger and assume more risk.
But neither bill spells out much detail, largely leaving that up to regulators -- with one difference. The Senate bill would make bank holding companies adhere to the same capital standards as bank subsidiaries. It would also bar bank holding companies from counting certain kinds of hybrid securities in meeting a key measure of strength.
Bank lobbyists will work hard in conference to kill this additional Senate provision. Its author, Senator Susan Collins, was one of only four Republicans to vote for the Senate bill, so she could have an edge.
The Senate bill would limit debit card fees and the House bill would not. Fee limits would be a victory for merchants and a defeat for big card firms. Bank lobbyists will push to kill the limits.
The House bill would force brokers who provide financial advice to adhere to the same standard as investment advisers, who have a fiduciary duty requiring them to act in their clients' best interest. Brokers now must ensure only that a financial product is suitable for a client.
The Senate bill only calls for a study of the issue.
(Reporting by Kevin Drawbaugh, Andy Sullivan, Kim Dixon and Rachelle Younglai; Additional reporting by Karen Brettell in New York; Editing by Leslie Adler)