Senate overhauls financial regulations

Stephens Washington Bureau

WASHINGTON -- The Senate last week passed an overhaul of financial regulations aimed at curbing risky Wall Street behaviors and fixing government shortcomings exposed in the economy's near-meltdown two years ago.

Senators voted 59-39 for the reform bill that sponsors said would improve the policing of banks, investment firms, mortgage brokers and others involved in high-level finance.

The bill creates a new consumer protection agency within the Federal Reserve. It also sets rules for trading financial derivatives, speculative investments that are potentially lucrative but were disastrous for the economy during the financial crisis of 2008.

The legislation also gives the government powers to seize and close down large financial institutions on the brink of collapse.

The bill was urged by President Barack Obama, written mostly by Democrats and passed following three weeks of Senate debate. It was sent to a conference committee to be negotiated alongside a corresponding House bill.

Bill supporters said it would protect Americans from financial upheavals they said were exacerbated in 2008 by risky activities undertaken by Wall Street firms.

Critics, mostly Republicans and financial groups, said the bill was almost punitive. They contended it would over-regulate the financial industry and stall the flow of capital that makes the economy go.

Sen. Harry Reid, D-Nev., voted for the bill. Sen. John Ensign, R-Nev., voted against it.

Contact Stephens Washington Bureau Chief Steve Tetreault at stetreault@stephensmedia.com
or 202-783-1760.