The Senate Banking Committee is set to begin marking up Chairman Chris Dodd’s (D-CT) financial regulatory reform bill today, which means working through (or dismissing) 473 different amendments. Many of those are pointless GOP amendments meant to waste time — such as more than 50 changing the effective start date of the legislation — but others reflect the current Republican courtship of the banking industry.

For starters, many of them aim to mitigate Dodd’s attempts to rein in banks that are “too big to fail,” including preventing regulators from implementing higher capital standards on the very biggest financial institutions. And one in particular, proposed by the Sen. Richard Shelby (R-AL), would further weaken the already scaled-back “Volcker rule” in Dodd’s bill.

The Volcker rule — proposed by the Obama administration and named after former Federal Reserve Chairman Paul Volcker — would ban banks from engaging in trading for their own benefit (proprietary trading) with federally insured dollars. Dodd has already weakened the rule, taking the administration’s hard ban and allowing bank regulators more latitude in implementing it. But the banks want this watered down even further:

The current language in the draft says federal agencies “shall issue final regulations implementing” the Volcker rule…“We believe the regulators should have the discretion to deal with the situation on a company-by-company basis,” said Scott Talbott, senior vice president of government affairs at the Financial Services Roundtable, a Washington-based trade group. “You can’t have a blanket prohibition on proven risk- management techniques.” When senators meet to debate changes, “our hope is that they change ‘must’ to ‘may,’” Talbott said.

And lo and behold, Shelby has amendments doing exactly that:

Amendment Number	Sponsor	Description
187	Shelby	Amendment modifies Volker Rule language to provide greater discretion for regulators
188	Shelby	Amendment modifies source of strength language from a “shall” to a “may”, and includes a study

So Talbott, who represents the 100 largest financial firms in the country, asks and Shelby delivers! But as Volcker himself said, giving regulators too much leeway in implementing regulations leads to lax enforcement, when the banks lay their pressure on and complain that enforcement will cut into their bottom lines. “In my opinion, it’s very unlikely that the regulators and supervisors would evoke a strict prohibition until a crisis came and then it’s too late,” Volcker said. “Look, I’ve been a regulator for 20 years. So I know how they are.” Volcker advocated a strict legislative ban on proprietary trading with federally insured money that banks can’t escape.

But this is really par for the course for Republicans recently, as they have been hardly trying to hide their bank-friendly actions. Last week, House Minority Leader John Boehner (R-OH) told the banks to stand up to “punk staffers” writing new regulations, while Shelby himself added that bank profits always trump consumer protection.

This evening, the Senate Banking Committee is scheduled to begin markup of Chairman Chris Dodd’s (D-CT) financial regulatory reform legislation. A total of 473 amendments have been proposed, with Republicans accounting for the bulk of them. In fact, Sens. Richard Shelby (R-AL) and Bob Corker (R-TN), who were Dodd’s main negotiating partners on the Republican side, have proposed more than 200 of those (with Shelby putting forward 110 and Corker 98). All of the Democrats combined have suggested 94 amendments.

Many of the GOP’s amendments are pure nonsense, seemingly aimed at running out the clock until the Senate adjourns for a two week recess on Friday. For instance, Sen. Jim Bunning (R-KY) — the same senator who ground the senate to a halt to prevent the extension of unemployment benefits — has proposed 24 different amendments to change the effective date of the legislation’s implementation. Sen. Mike Johanns (R-NE) and Sen. David Vitter (R-LA) have 25 and 14 different amendments, respectively, also delaying the legislation’s effective start date.

Annoying, time-wasting amendments aside, Republicans are also aiming to water-down the substance of the bill, particularly that meant to rein in banks that are “too big to fail.” Dodd’s bill creates a resolution authority to unwind failing, systemically risky firms, which would be pre-funded by an assessment on the very largest financial firms. But Republicans not only want to do away with the pre-funded authority, they don’t even want to place stricter standards for capital and leverage on the biggest banks. Here is a roundup of GOP amendments aimed at weakening the way in which Dodd deals with “too big to fail”:

Amendment Number	Sponsor	Description
2	Vitter	To remove the ability of the systemic risk council to pre-designate firms as ‘too big to fail’ and arbitrarily regulate non financial companies.
8	Vitter	To end the FDIC’s authority to create a bailout slushfund and designate certain firms as too big to fail.
10	Vitter	To prohibit the creation of a prefunded resolution regime.
128	Shelby	Eliminate the authority for the Council to recommend heightened standards for the designated nonbank financial companies and large bank holding companies and requiring the Council to develop, construct, and perform stress tests
134	Shelby	Eliminate the authority of the Council to designate nonbank financial companies for regulation by the Board of Governors
135	Shelby	Eliminate Council and Board of Governors authority to pre-designate certain bank holding companies for heightened standards
175	Shelby	No Pre Funding
374	DeMint	To strike title II (relating to orderly liquidation authority)

So despite all their lip service paid to ending bailouts and “too big to fail” once and for all, these amendments prove that the Republicans really have no interest in doing either. The don’t want to place stricter standards on the biggest banks, they don’t want big non-banks (like AIG) to be regulated, and they don’t want the biggest banks to pay into a fund to prevent taxpayer funds from being tapped to resolve a firm. This is dressed up with words like “slushfund” and “arbitrarily regulate,” but what the GOP wants is for Dodd to ditch any language specifically aimed at the very biggest banks.

While it would be nice to live in a world in which the very biggest financial firms do not pose a systemic threat to the economy (and Dodd’s bill could arguably do much more toward getting us there), simply pretending that the very biggest banks aren’t systemically risky is silly.

At the very least, they should be subjected to stricter standards and have to pay into a fund that will be tapped if one of them has to be unwound. But Republicans would rather close their eyes and pretend that globally-linked financial institutions can just fail, without taking the rest of the economy down with them, while Dodd has laid out steps to responsibly unwind such firms without relying on taxpayer dollars.