The Shelby-Dodd amendment to the Democrats’ financial overhaul bill has passed in the Senate by a vote of 93-5.
The amendment abandons the $50 billion resolution fund, and adopts instead a credit line from Treasury to the FDIC for use in liquidating large, systemically important firms. Losses incurred under the scheme would then be recouped by a bankruptcy-like liquidation. It also requires Congressional approval for regulators to guarantee the debt of financial firms.
CQ has more on the bill.