Annie Lowrey prints a list of priorities from Neal Wolin, the deputy Treasury Seceretary, for the conference committee of the Wall Street reform bill. Wolin made the remarks at the annual conference of FINRA. You can measure this blueprint for what Treasury seeks out of conference against what a bank reformer like Sen. Ted Kaufman seeks. Here’s Wolin’s list:

First, we remain focused on an issue that I know is of particular relevance to many of you here: fiduciary duty. We believe that retail brokers offering investment advice should be subject to the same fiduciary standard of care as investment advisors, and we will work to include that provision in the final bill. …

Second, we oppose efforts to weaken the consumer protection agency — including, in particular, the carve-out for auto dealers. Despite the fact that the auto dealers originate almost eighty percent of the auto loans in this country — and despite the fact that, after homes, automobile purchases are the most significant financial investments most American families make — the dealer-lenders have lobbied vigorously for a carve-out….

Third, we will work hard to include the so-called “Volcker Rule” provisions, which would protect taxpayers and depositors by separating “proprietary trading” from the business of banking — and, in addition, would limit the size of financial firms by preventing acquisitions that would result in a concentration of more than ten percent of the liabilities in the financial system.

Fourth, we will advocate for inclusion of the strong rules on conflicts of interest and transparency at credit rating agencies.

And fifth, with respect to resolution authority, we will seek to ensure that there are sensible safeguards in place to prevent resolution authority from being used unless absolutely necessary — but that regulators retain the ability to act swiftly and effectively in times of crisis, to protect taxpayers and to minimize the risk of panic or contagion.

Kaufman and Wolin overlap in precisely one area – the Volcker rule. Hopefully that means language more mandatory and closer to the spirit of the Merkley-Levin amendment than what currently exists. It’s also notable that Wolin says Treasury will work to block a carve-out for auto dealers from CFPA oversight, despite passage of that amendment in the House and substantial support for a nonbinding resolution to that in the Senate.

However, Wolin sidesteps the derivatives issue, not mentioning the parts of the Lincoln title that the Administration nominally supports, like clearing and exchange trading, and certainly not mentioning the spin-off of swaps trading desks, which Treasury opposes.

Michael Barr, an assistant treasury secretary, and Diana Farrell, deputy director of the National Economic Council, repeatedly deflected questions on the provision — authored by Sen. Blanche Lincoln (D-Ark.) — which has drawn fierce opposition from the industry, Republicans and some Democrats. It is expected to be a key flash point in the joint House-Senate conference committee set to begin work next month.

“The key for us is what are the president’s core set of reforms, and are those in the bill?” Barr said, citing the need to require transparency of all derivatives transactions, central clearing and exchange trading of derivatives, prudential oversight and strong enforcement.

“Those four key objectives need to be in the final bill,” he continued. “There are other provisions like the Lincoln provision that are not part of the core set of questions, and I think those are going to be worked through in Congress.”

Clearly the Treasury considers stopping the subsidizing of risky derivative market-making, through the discount window and depositor insurance, to be extraneous to what they regard as a regulatory problem. Perhaps they believe that the Volcker rule will be sufficient to take care of conflicts of interests and separating risky trading from commercial banking. I see no reason why you don’t want to be redundant about that, especially considering that the Volcker rule as written allows for a lot of regulatory discretion. The objections that the banking lobby and their champions make about the trading desk provision come down to money – they don’t want to lose the lucrative market, and they don’t want to supply extra capital to create subsidiaries to handle the trades. I have no sympathy for financial firms bailed out by the government who don’t want their activities properly capitalized.

Blanche Lincoln, who claims that her derivatives proposal “will pass”, might want to get in the game here. All of official Washington has lined up against it, and they’re ready to pounce after the runoff election on June 8. It would be nice if Lincoln would even describe her proposal, let alone defend it.