House approves financial overhaul

The House on Friday passed a wide-ranging financial overhaul bill intended to boost consumer protection and crack down on abuses on Wall Street.

The House approved the bill on party lines in a 223-202 vote, with no Republicans favoring the measure, a top priority for the Obama administration. Twenty-seven Democrats crossed party lines and voted against the bill.

"The president set forth clear objectives and principles for reform that were endorsed by Congressional leaders. House passage of this bill moves us an important step closer to meeting the President’s objectives for reform," said Treasury Secretary Timothy Geithner.

The bill creates a new Consumer Financial Protection Agency (CFPA), imposes new curbs on the multitrillion-dollar derivatives market and sets up a new system for dissolving failing financial firms.

House Financial Services Committee Chairman Barney Frank (D-Mass.) spent much of this year drafting the measure.

The Senate will likely vote next year on financial overhaul legislation.

The legislative effort follows last year's financial crisis, which exacerbated a recession and ushered in the $700 billion bailout of the financial system.

The bailout has had a positive impact on financial markets, with rising markets, investment banks reporting record bonuses and many institutions paying the government back on its investment. But that has stoked public resentment toward Wall Street, particularly with much of the country sunk in a deep recession.

The House bill headed for passage after Democrats beat back an effort to scrap the CFPA agency.

Rep. Walt Minnick (D-Idaho) sponsored one of the most closely watched amendments of the debate, which would have created a council of existing regulators instead of a new agency.

The amendment failed on a 208-223 vote. Minnick’s effort drew support from the U.S. Chamber of Commerce, parts of the financial industry, some centrist Democrats and Republicans.

“How many times are we going to create a massive new federal bureaucracy to deal with an important priority?” Minnick said on the House floor. He voted for the underlying bill after his amendment failed.

House leadership whipped strongly against the Minnick amendment. But allowing a vote on the amendment also gave centrist Democrats the ability to vote in favor of a provision backed by the Chamber.

Centrist Democrats Reps. Melissa Bean (Ill.) and Dennis Moore (Kan.) spoke against the amendment on the floor.

“This creates a bureaucratic nightmare,” Moore said.

A key part of the debate centered on how to dissolve financial firms that are failing and threaten the economy. The bill creates a government-run fund supported by assessments on the financial industry.

“We have a fund that comes not from taxpayers but from large financial institutions,” Frank said.

Republicans repeatedly criticized the bill as perpetuating bailouts.

“The time has expired on bailouts,” said Rep. Spencer BachusSpencer BachusThe FDA should approve the first disease-modifying treatment for Duchenne Muscular Dystrophy Study: Payday lenders fill GOP coffers Pope Francis encourages building bridges to address challenges  MORE (R-Ala.).

As part of the debate on Friday, the House voted against an amendment that would have given bankruptcy judges greater power to rewrite home mortgages.

The financial industry strongly opposed the effort, which it calls “cramdown.”

The vote failed, 188-241. The House passed a similar measure in the spring, but it failed by 15 votes in the Senate.

The House also voted to retain an exemption for firms with $75 million or less from audit requirements under the Sarbanes-Oxley Act.

The vote came on an amendment sponsored by Frank and Rep. Paul Kanjorski (D-Pa.) that would have removed the exemption.

The Democratic Congressional Campaign Committee was also raising money to run ads against Republicans who oppose financial overhaul legislation.

“I ask your financial support for the Democratic Congressional Campaign Committee, so that members who vote in favor of tough financial regulation will know that we will stand with them when they are attacked by candidates backed by powerful defenders of the status quo,” Frank wrote in a fundraising e-mail.

The 27 Democrats voting against the bill were: Marion Berry (Ark.), Dan Boren (Okla.), Rick Boucher (Va.), Bobby Bright (Ala.), Ben Chandler (K.y.), Henry Cuellar (Tex.), Lincoln Davis (Tenn.), Chet Edwards (Tex.), Parker Griffith (Ala.), Debbie Halvorson (Ill.), Baron Hill (Ind.), Marcy Kaptur (Ohio), Ann KirkpatrickAnn KirkpatrickMoulitsas: The year of the woman Senate rivals gear up for debates McCain opponent releases new ad hitting his record MORE (Ariz.), Dennis Kucinich (Ohio), Eric Massa (N.Y.), Mike McIntyre (N.C.), Harry Mitchell (Ariz.), Solomon Ortiz (Tex.), Tom Perriello (Va.), Mike Ross (Ark.), Kurt Schrader (Ore.), Ike Skelton (Mo.), Zack Space (Ohio), Bart Stupak (Mich.), Gene Taylor (Miss.), Harry Teague (N.M.) and Pete Visclosky (Ind.)

The seven Democrats who did not vote were: Tammy BaldwinTammy BaldwinAnti-trade senators say chamber would be crazy to pass TPP Dem senator: Dean's speculation about Trump cocaine use not 'useful' EpiPen investigation shows need for greater pricing transparency, other reforms MORE (Wisc.), Zoe Lofgren (Calif.), Stephen Lynch (Mass.), Jim MoranJim MoranHouse Dem: Congress needs 'courage' to call for its own pay raise House may resume work on spending bills next week Bottom Line MORE (Va.), Jim Oberstar (Minn.), Charles Rangel (N.Y.) and Louise Slaughter (N.Y.). Republicans not voting were Reps. Pete Sessions (Tex.) and Don YoungDon YoungOur National Forests weren't designed just for timber Big Oil makes a push for risky and reckless Arctic drilling House bill would up Fish and Wildlife funding by .3B MORE (Alaska).