Senate passes Wall St. reform

Congress finalized sweeping financial overhaul legislation on Thursday, handing President Obama a major legislative victory heading into the midterm elections.

The Senate voted 60-39 to approve the 2,315-page bill after cutting off debate on the measure. The House already passed the measure.

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“We all know Wall Street isn’t going to reform itself,” said Senate Majority Leader Harry Reid (D-Nev.). “Those who vote ‘no’ are standing with the same bankers who gambled with our homes and economic security in the first place.”

Republican Sens. Susan Collins (Maine), Olympia Snowe (Maine) and Scott Brown (Mass.) joined all but one Democrat in support of the legislation. Sen. Russ Feingold (Wis.) was the lone Democrat opposed to the measure, which he said was not tough enough on the industry. The Senate earlier Thursday approved 60-38 a procedural motion to end debate on the legislation.

Obama is planning to sign the bill next week, a little less than two years after the worst financial crisis since the Great Depression enveloped the broader economy.

House Financial Services Committee Chairman Barney Frank (D-Mass.) and Senate Banking Committee Chairman Chris Dodd (D-Conn.) shepherded the measure through Congress over the last year. The bill is called the “Dodd-Frank Wall Street Reform and Consumer Protection Act."

Obama hailed the work of Pelosi, Dodd and Frank, who he said had prevailed "despite the massive lobbying effort from the financial industry" to stop the legislation.

The president also praised the three Republicans who voted for the bill, saying they "put politics and partisanship aside today."

Obama said the new bill, which he will sign next week, will end taxpayer-funded bailouts of financial institutions deemed "too big t fail." Obama also said that Wall Street should not be concerned about the new laws unless they count on underhanded tactics.

"Unless your business model depends on cutting corners or bilking customers, you have nothing to fear from this reform," Obama said.

Obama criticized House Minority Leader John Boehner (R-Ohio) for calling for the repeal fo the bill, saying "America can't afford to go backwards."

The bill sets up a new consumer protection regulator to oversee products like home loans and credit cards; boosts regulation of the $600 trillion derivatives market; creates a new council of regulators to assess risks across the financial system; and sets up a new system for failing financial firms.

The legislation largely resembles a plan put forth by the Obama administration last year.


Republicans criticized the legislation for increasing the size of the government and threatening to restrict credit at a time when the economy is suffering near double-digit unemployment.

House Minority Leader John Boehner (R-Ohio) on Thursday said the new regulations should be repealed.

“I think it ought to be repealed,” Boehner said at his weekly press conference. ”There are commonsense things that you should do to plug the holes in the regulatory system that were there, and to bring more transparency to financial transactions, because transparency is like sunlight. Sunlight is the best disinfectant.”

Financial lobbyists worked aggressively against many of the core provisions in the bill, particularly new restrictions on derivatives and the new Consumer Financial Protection Bureau.

Consumer advocates and financial lobbyists are already preparing for years of debate before federal regulatory agencies that are required under the bill to issue new rules.

“Serious work remains; the proof of the bill's worth will come not from what is written in the bill, but how the regulators interpret the bill, write the rules and then enforce them,” said John Taylor, president and CEO of the National Community Reinvestment Coalition. “Based on the job they did for the past decade, I will believe reform is here when I see it.”

Sam Youngman contributed to this story.