Amendment to break up big banks fails in Senate

An amendment that would have limited the size of banks was defeated Thursday night by a 61-33 vote. 

Sen. Ted Kaufman (D-Del.), co-sponsor of the provision to the financial reform regulation legislation under consideration in the Senate expressed regret but was pleased to have started a debate about 'too big to fail' banks. 

"I am disappointed. This is certainly a defeat for those who are concerned about the dangers of financial concentration in this country," Kaufman said in a release shortly after the vote. 

Three Republicans joined 30 Democrats in voting for the amendment -- Sens. Richard Shelby (R-Ala.), Tom Coburn (R-Okla.) and John Ensign (R-Nev.). Senate Majority Leader Harry Reid (D-Nev.) also voted for the amendment. 

During a conference call earlier today, Kaufman and co-sponsor Sen. Sherrod Brown (D-Ohio) said the size of banks needed closer examination despite arguments by the Obama administration that the size of financial institutions isn't the biggest problem. 

Brown and Kaufman diligently hawked their idea, getting support from more than 250 consumer, investor, community, among other groups supporting the amendment. 

As last as this afternoon, the White House wouldn't commit its support. 

Still, Kaufman was upbeat despite the amendment's defeat. 

"I believe this idea was sound policy -- and I further believe that a mainstream consensus will continue to grow that these megabanks are too large, to complex and too internally conflicted to regulate successfully," he said. 

The amendment would have imposed a strict 10 percent cap on any bank-holding company's share of the United States' total insured deposits, limited the size of non-deposit liabilities at financial institutions to 2 percent of gross domestic product for banks and 3 percent of GDP for non-bank institutions, set a 6 percent leverage limit for banking holding companies and select nonbank financial institutions.