Financial Overhaul Goes Forward On Bipartisan Votes

Senate leaders on the financial regulatory bill have reached a bipartisan agreement on an orderly way to liquidate failing banks. That clears the way for full debate on the measure. But senators still face disagreements over consumer protection and derivatives.

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And yesterday, the Senate launched debate on the bill that would rewrite the rules for Wall Street with the first round of voting on amendments.

NPR's Audie Cornish has this report.

AUDIE CORNISH: Negotiations over how the bill deals with financial companies considered too big to fail has held up the legislation for days. So, Senator Chris Dodd says Democrats are giving up the idea of taxing the banks for a $50 billion fund to shut down failed firms.

Senator CHRIS DODD (Democrat, Connecticut, chairman, Senate Banking Committee): So, because whether they pay in advance or after the fact, these costs will be paid by Wall Street and not taxpayers, I have no objections to dropping that provision.

CORNISH: Instead, the new provisions hatched by Dodd and Senator Richard Shelby, would pay for liquidations with loans from the Treasury. Those taxpayer dollars will be recouped by selling off the failed company's assets. Shelby says the new provisions would also make financial regulators more accountable for the way they handle emergency lending.

Senator RICHARD SHELBY (Republican, Alabama): I believe we must put an end to the ad hoc responses of the federal governments which only lead to fear and to panic.�I believe these changes will help us do that.

CORNISH: But just because the amendment was approved on a vote of 93 to five doesnt mean its smooth sailing on the financial bill. There are nearly 100 more amendments to go. In the next round, expect debate on hot button issues like the proposed Consumer Financial Protection Bureau and another measure giving government investigators more power in auditing the Federal Reserve.

Audie Cornish, NPR News, the Capitol.

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