May 19 (Reuters) - The Obama administration and
congressional Democrats are moving to tighten U.S. financial
regulations to prevent another banking and market crisis.

Changes will affect banks, insurers, credit rating
agencies, hedge funds, private equity firms, brokerages and
exchanges, while extending the government's reach into the
financial sector. The following are some of the major issues:

CREDIT CARDS:

The U.S. Senate on Tuesday approved a bill with tougher
rules for the credit card industry, sending it to the House of
Representatives, where prompt passage was likely.

President Barack Obama was expected to sign it into law by
the end of May. It would curb sudden interest rate increases on
credit card accounts and curtail hidden fees. Much of the
measure was opposed by the banking industry, which warned that
the bill would reduce the availability of credit to consumers.

Political risk exposure: American Express (AXP.N: Quote, Profile, Research), Bank of
America (BAC.N: Quote, Profile, Research), JPMorgan Chase (JPM.N: Quote, Profile, Research), Capital One (COF.N: Quote, Profile, Research),
Citigroup (C.N: Quote, Profile, Research), Discover Financial (DFS.N: Quote, Profile, Research).

OTC DERIVATIVES:

The administration last week proposed cracking down on
over-the-counter derivatives with a plan to move more trading
onto exchanges, require central clearing, supervise dealers
more closely and bring more transparency to an opaque market.

Political risk exposure: JPMorgan Chase, Bank of America,
Citigroup, Goldman Sachs (GS.N: Quote, Profile, Research), CME Group Inc (CME.O: Quote, Profile, Research),
Intercontinental Exchange (ICE.N: Quote, Profile, Research).

SYSTEMIC RISK REGULATOR:

The Obama administration is expected to propose legislation
soon calling for the Fed to play a central role in regulating
systemic risk in the economy. No single agency is now formally
designated to monitor systemic risk.

Alternative legislation has been introduced in Congress to
establish an interagency council on financial stability.

UNWINDING FAILING FIRMS:

The administration has sent Congress a draft "resolution
authority" bill to empower the government to seize and unwind
large, failing financial firms that are not banks.

No clear procedure for this exists. A seizure would require
approval of the Treasury Department, the Federal Reserve and
Federal Deposit Insurance Corp, with White House consultation.

The Treasury and the FDIC would decide whether to offer
financial aid to the seized firm or put it in conservatorship.

HOUSING, MORTGAGES AND SECURITIZATION:

The House and Senate were inching toward final agreement on
a shrinking list of initiatives to help distressed homeowners.

The House passed a measure on Tuesday designed to retool a
2008 federal program meant to refinance 400,000 troubled
mortgages that has attracted little interest due to red tape.

The Senate approved a bill on May 6 to retool the program
and encourage mortgage servicers to ease the terms of
distressed loans. A House-Senate agreement could come soon.

The House separately approved a bill on May 7 to force
mortgage lenders to keep 5 percent of loans they securitize,
tighten mortgage broker oversight and protect borrowers. That
measure is now languishing in the Senate.

Political risk exposure: Citigroup, Wells Fargo (WFC.N: Quote, Profile, Research),
Bank of America, JPMorgan.

EXECUTIVE PAY:

U.S. officials are looking at ways to force reforms in
financial industry pay practices to discourage excessive
risk-taking. The Fed said last week it was looking at what
regulatory steps could be taken.

The Treasury has said the administration is working with
the Securities and Exchange Commission (SEC) on industry-wide
compensation reform.

A pay provision is expected to be included in a sweeping
Obama administration financial regulation reform proposal.

HEDGE FUNDS, PRIVATE EQUITY:

A major U.S. hedge fund industry group told lawmakers on
May 7 it supports requiring all hedge fund investment advisers
to register with the SEC. The Managed Funds Association joined
other policy-makers and regulators in supporting registration.

Lawmakers have recently introduced several bills in
Congress to give the SEC registration authority.

The Treasury wants advisers to hedge funds, private equity
funds and venture capital funds, whose assets under management
exceed a not-yet-determined level, to register with the SEC.

Political risk exposure: Bridgewater Associates, D.E. Shaw
Group, Farallon Capital Management, Citadel Investment Group,
Fortress Investment Group (FIG.N: Quote, Profile, Research), many others.

SHORT-SELLING:

The SEC will meet soon to finalize an interim rule that
requires large short sellers to disclose their positions to the
agency. It is not clear whether the agency will require the
positions to be disclosed publicly.

The agency is also considering five proposals that would
restrict short-selling, including the restoration of an updated
uptick rule, which allows shorting only when a stock's last
sale price was higher than the previous price.

STUDENT LOANS:

President Barack Obama's 2010 federal budget proposed
ending the giant federally-guaranteed student loan program and
moving most of the country's $90 billion in student lending
into the direct-loan program run by the Education Department.

The proposal is subject to review by Congress and possible
changes. The student loan industry is resisting the proposal
and has put forth alternative strategies.

Political risk exposure: Sallie Mae (SLM Corp) (SLM.N: Quote, Profile, Research),
Student Loan Corp (STU.N: Quote, Profile, Research), JPMorgan, Bank of America, ITT
Educational Services (ESI.N: Quote, Profile, Research), Corinthian Colleges (COCO.O: Quote, Profile, Research).

BANK CAPITAL STANDARDS:

U.S. regulators are expected to craft stricter capital
standards for banks. Financial institutions will also face new
liquidity requirements, about which bank regulators are
expected to issue guidance during the first half of this year.

CREDIT RATING AGENCIES:

The SEC is considering reforms to crack down on potential
conflicts of interest at credit rating agencies. Final action
is likely months away.

Political risk exposure: Moody's Corp (MCO.N: Quote, Profile, Research), Standard &
Poor's (MHP.N: Quote, Profile, Research), Fitch Ratings (LBCP.PA: Quote, Profile, Research).

INSURERS:

The House insurance subcommittee held a hearing last week
on insurance industry regulation, with the industry still
largely divided over whether to establish a national regulator
to supplement the present state-based oversight system.

Political risk exposure: Allstate Corp (ALL.N: Quote, Profile, Research), Travelers
Cos Inc (TRV.N: Quote, Profile, Research), Hartford Financial (HIG.N: Quote, Profile, Research), MetLife Inc
(MET.N: Quote, Profile, Research), Prudential Financial Inc (PRU.N: Quote, Profile, Research).

PROXY ACCESS:

The SEC is set to meet on Wednesday to consider giving
shareholders an easier and cheaper way to nominate corporate
board directors. A proposal known as "proxy access" has long
divided the SEC and pits business groups against labor unions.
The business community has already suggested it will sue the
SEC if the agency gives shareholders more access to the proxy.