Prodded by national anger at Wall Street, the US Senate on Thursday passed the most far-reaching restraints on big banks since the Great Depression. In its broad sweep, the massive bill would touch Wall Street CEOs and first-time homebuyers, high-flying traders and small town lenders.
The 59-39 vote represents an important achievement for President Barack Obama, and comes just two months after his health care overhaul.
The bill must now be reconciled with a House version that passed in December. A key House negotiator predicted the legislation would reach Obama’s desk before the July 4 holiday.
As House and Senate negotiators meet to work out differences in the bills, the common ground between the two bills will likely tilt toward making the bill tougher on banks rather than weaker.
The legislation calls for new ways to watch for risks in the financial system and makes it easier to liquidate large failing financial firms. It would impose new restraints on the largest, most interconnected banks and demand proof that borrowers could pay for the simplest of mortgages.
“Our goal is not to punish the banks but to protect the larger economy and the American people from the kind of upheavals that we’ve seen in the past few years,” Obama said. The financial industry, he said, had tried to stop the new regulations “with hordes of lobbyists and millions of dollars in ads.”
The bill was solidly supported by Obama’s Democratic Party. Republicans uniformly opposed the bill at every turn.
“The decisions we’ve made will have an impact on the lives of Americans for decades to come,” said Republican Sen. Richard Shelby, who voted against the legislation. “The marketplace does not give credit for good intentions.”
Democrats argued the bill was a potent response to the financial abuses, regulatory weaknesses and consumer misjudgments that plunged the nation deep into recession.
“To Wall Street, it says: No longer can you recklessly gamble away other people’s money,” said Senate Majority Leader Harry Reid, a Democrat. “It says the days of too big to fail are behind us. It says to those who game the system: The game is over.” AP