Senate Passes Sweeping Financial Overhaul Bill
ROBERT SIEGEL, host:
From NPR News, this is ALL THINGS CONSIDERED. I'm Robert Siegel.
MICHELE NORRIS, host:
And I'm Michele Norris.
Today, a major victory for President Obama and Democrats. The Senate cleared a far-reaching bill to overhaul the financial regulatory system, sending it to the president for his signature. The measure rewrites the rules for Wall Street in hopes of preventing the kinds of problems that led to the 2008 financial crisis. And unlike the health care debate, this time, Senate Democrats got a little help from their Republican friends.
NPR's Audie Cornish reports.
AUDIE CORNISH: Nearly two years ago, lawmakers were wringing their hands over a financial system on the verge of collapse, and a request for $700 billion needed to save it.
Today, Senate Majority Leader Harry Reid hailed the passage of a financial regulatory bill as the end of taxpayer-funded rescues.
Senator HARRY REID (Democrat, Nevada; Senate Majority Leader): No more bailouts, because no bank is too big to fail. Were going to give consumers and investors the strongest protections theyve ever had.
CORNISH: The final votes were not even in when consumer advocates like Heather Booth of Americans for Financial Reform joined Democrats in their victory lap.
(Soundbite of applause)
Ms. HEATHER BOOTH (Executive Director, Americans for Financial Reform): Finally, we are almost at a victory for Main Street and not just for Wall Street and the biggest banks.
CORNISH: Three Republicans helped the Democrats move the bill along. Tennessee Senator Bob Corker - at one point a top negotiator - was not one of them. He says the bill veered too far to the left.
Senator BOB CORKER (Republican, Tennessee): I think they've miscalculated. I think that they thought going into this, like, we're going to create a bill that bashes Wall Street and all the Americans are going to love us. And we're going to do it along partisan lines, and Republicans aren't going to be involved and that's going to be great.
I think what Americans are looking for is the two parties in this country addressing the core issues that are affecting the country. And that bill - this bill doesn't do that.
CORNISH: The final version includes provisions that many thought would not survive, such as the new consumer protection bureau which is supposed to fight abusive practices and consumer products such as mortgages and credit cards. Republicans called the proposed agency an unnecessary addition to the current alphabet soup of regulators: the Fed, the FCC, the CFTC, FDIC and more.
Republican Senator Richard Shelby.
Senator RICHARD SHELBY (Republican, Alabama): All the Democrats will succeed in doing with the help of a few Republicans is give the failed bureaucracies more power, more money and a pat on the back with the hope that they will do a better job next time.
CORNISH: Despite the outcry about failed regulators, the bill's architects managed to cut just one, the Office of Thrift Supervision. The remaining regulators will form a council with new power to ferret out risky activity and shorten the regulatory leash on financial firms it considers too big to fail.
Democratic Senator Chris Dodd, the bill's sponsor, says regulators, not lawmakers, are still in the best position to watch Wall Street.
Senator CHRIS DODD (Democrat, Connecticut; Chairman, Senate Banking Committee): I can't legislate integrity. I can't legislate wisdom. I can't legislate passion or competency. What we can do is create the tools and the architecture that allow good people to do a good job on behalf of the American public.
CORNISH: Under the legislation, giant financial institutions could be made to draw up a living will of sorts so regulators could avoid chaos and liquidate them quickly. The bill puts so much emphasis on reports and studies that banking lobbyists like Rob Nichols of the Financial Services Forum are already focusing on what comes after the bill is signed.
Mr. ROBERT S. NICHOLS (President and Chief Operating Officer, Financial Services Forum): A good analogy is that there's, you know, we have the frame of the house in place. We know where the kitchen is, we know where the bathroom is, but we don't yet know the color of the tile in the bathroom. And that's going to be the regulatory process.
CORNISH: So this isn't over. Many of those decisions could be right back before Congress in one way or another, as regulators draw up the new rules.
Audie Cornish, NPR News, the Capitol.