Senate Moves Finance-Overhaul Bill

Senate Moves Finance-Overhaul Bill to Final Action (Update1)

By Alison Vekshin

July 15 (Bloomberg) -- The U.S. Senate voted today to clear the path for final action on the biggest rewrite of Wall Street rules since the Great Depression.

The Senate voted 60-38 to limit debate and allow the legislation to move toward a final vote on the bill, which will come soon after 2 p.m. today Washington time. The 60-vote barrier was the key hurdle faced by Democrats, who maneuvered and compromised in recent weeks to secure three Republican votes. Final passage requires a simple majority of the 100- member Senate.

“This is a major undertaking, one that is historic in its proportions, that is an attempt to set in place the structure that will allow us to minimize problems in the future,” Senate Banking Committee Chairman Christopher Dodd, a Connecticut Democrat who helped write the bill, said today on the Senate floor.

The Senate’s approval would send the bill to President Barack Obama. It will represent a victory for Obama, who proposed the regulatory overhaul in response to the 2008 financial crisis that led the U.S. to provide $700 billion in bailout funds for companies including New York-based insurer American International Group Inc.

The House of Representatives approved the bill on June 30.

Most Senate Republicans voted to block final consideration. Republicans say the bill doesn’t go far enough to prevent future taxpayer-funded bailouts of Wall Street firms and creates a new bureaucracy by setting up a consumer financial protection bureau at the Federal Reserve.

Shelby

Senator Richard Shelby, the banking committee’s top Republican, called the bill a “2,300-page legislative monster.”

“It creates vast new bureaucracies with little accountability and seriously, I believe, undermines the competitiveness of the American economy,” Shelby of Alabama said.

Democrats secured the 60 votes to limit debate after Republican Senators Scott Brown of Massachusetts and Olympia Snowe and Susan Collins of Maine announced their support this week. The decisions by the three New England Republicans came after Democrats removed a $19 billion fee on banks and hedge funds that was meant to help pay for the bill.

The bill would set up a mechanism for liquidating failing financial firms whose collapse would roil markets and a council of financial regulators to police firms for systemic risk to the economy. It also strengthens oversight of executive compensation and derivatives, contracts whose value is derived from stocks, bonds, loans, currencies and commodities.

“No longer will we have a ‘Heads I win, tails you lose’ attitude on Wall Street toward the American middle class,” House Speaker Nancy Pelosi said today at a news conference.