U.S. lawmakers approved a mammoth overhaul of the financial system, marking the end to an era of hands-off regulation and the start of a bid to forestall future crises.
The reform package overcame a final hurdle Thursday when the Senate passed it in a tight vote largely on partisan lines. President Barack Obama is expected to sign the landmark bill into law at a ceremony next week.
The Senate vote caps more than a year of legislative wrangling and intense lobbying, culminating in a 2,300-page bill that does more to reshape the financial industry than any measure since the Great Depression.
“The American public expects nothing less of us than to fashion proposals that will minimize great risks to them,” said Senator Christopher Dodd, a Democrat and a principal architect of the legislation.
“They know we have not solved every problem and that we are not going to bring back their homes and their jobs; but they expect us to respond to the situation that brought us to the brink of financial disaster. This is our best effort to do so.”
In a sign of the partisan chasm in Washington ahead of November’s midterm elections, only three Republican senators crossed party lines on Thursday to allow the legislation to move forward, by a vote of 60 to 39. Other Republicans decried the bill, describing it as a “legislative monster” that will increase bureaucracy and prolong uncertainty in the financial industry. One Democrat voted against it, saying it did not go far enough.
Whether the legislation is sufficient to head off future financial disaster is a subject of fierce debate. The bill gives regulators critical tools they lacked in 2008, including the ability to seize sinking financial institutions and require them to spin off holdings that threaten the overall system. A vast swath of financial markets, previously beyond the grasp of regulators, will be subject to supervision. And a powerful new agency will protect consumers in transactions from mortgages to credit cards.
