WASHINGTON – The Senate voted 59-39 late Thursday to pass a sweeping rewrite of financial-sector regulations.
The 1,500-page bill includes an array of curbs on banking and finance, aimed at creating new consumer protection rules, providing more scrutiny of big bank operations, and insulating taxpayers from future bailouts of financial companies. Opponents argued throughout lengthy debate that the measures will over-regulate the financial industry.
Democrats secured support from a handful of Republicans to win final passage. The measure is a major part of the domestic agenda of the Obama administration.
Lawmakers must now reconcile differences between the Senate bill and a similar measure that passed the House of Representatives in December.
Senate Majority Leader Harry Reid (D., Nev.) won the support of Massachusetts Republican Sen. Scott Brown Thursday for the vote to end debate, a key step in moving the bill forward.
Mr. Brown voted against shutting off debate Wednesday. But he supported the effort Thursday after winning assurances that major Massachusetts-based mutual-fund companies—including Fidelity Investments and State Street Corp.—would be shielded from trading limits the bill would impose on big banks.
The Senate passed the bill without the Merkley-Levin amendment, an addition that would have imposed stricter language on the "Volcker Rule." Named after Obama economic adviser Paul Volcker, the "Volcker Rule" bars commercial banks from using taxpayer-backed money to trade for their own gainw. Without the Merkley-Levin amendment, sponsored by Sens. Jeff Merkley (D-OR) and Carl Levin (D-MI), regulators who were blamed for their lack of oversight preceding the financial crisis will be empowered to shape the "Volcker Rule" and possibly water it down.
Levin and Merkley's amendment was never debated on the Senate floor. Instead, "last-minute maneuvering" killed it. Levin said that it showed "the power of Wall Street," reports Reuters:
Last-minute maneuvering on the Senate floor killed two controversial amendments: one to tighten proposed restrictions on risky trading by banks, and another exempting car dealers that do not finance their own lending to auto buyers from oversight by a new federal consumer watchdog.
Republicans withdrew the auto-dealer amendment, offered by Senator Sam Brownback, so that the bank trading amendment, offered by Democrats Jeff Merkley and Carl Levin, would not come to a vote. It is firmly opposed by major financial firms.
Since Russ Feingold and Maria Cantwell didn't vote for it, I'm not doing the happy dance just yet.