Without one Republican vote, the House passed a deeply flawed bill that attempts to control the excesses of the financial services industry - while also letting them escalate many of the same crazy practices that led to this crisis. The Republicans, of course, thought the bill was too stringent.
The good news is that authorization for the Consumer Financial Protection Agency is included, and now the fight moves to the Senate:
Dec. 11 (Bloomberg) -- The U.S. House voted to tighten rules for derivatives and create powers to break apart healthy financial firms that threaten the economy in legislation passed today over objections of Wall Street and Republicans.
Lawmakers voted 223-202 to set up a Consumer Financial Protection Agency, expand oversight of hedge funds and build a $150 billion industry fund the government would use to take apart failed systemically risky firms. The House failed to add language letting bankruptcy judges reset mortgage terms, known as a “cram-down.” The focus now shifts to the Senate, where lawmakers lack a schedule for action on a bill.
“We are sending a clear message to Wall Street: The party is over,” House Speaker Nancy Pelosi said at a news conference after the vote.
The measure is central to lawmakers’ effort to end rescues of firms deemed too big to fail, which led to bailouts of New York-based American International Group Inc. and Citigroup Inc. The banking industry and the nation’s biggest business lobby fought to scale back the legislation. Republicans called the bill a permanent government bailout and 27 Democrats joined to vote against the measure.
“The free market, particularly when it’s in an innovative phase, works best with a fairly defined set of rules, and that’s what we’ve done,” House Financial Services Committee Chairman Barney Frank, a Massachusetts Democrat who offered the legislation, said today at the news conference.