Sweeping Wall Street reform bill advances

Final passage of sweeping bill could come this week

The Associated Press

updated 5:38 p.m. ET, Thurs., May 20, 2010

 

WASHINGTON - Barely breaking a logjam, the Senate voted Thursday to end debate on a massive financial regulation bill, clearing the way for final passage of the most ambitious effort to write rules for Wall Street since the Great Depression.

 

The vote was 60-40 to advance the legislation, which has become a top priority for President Barack Obama in the aftermath of his successful health care overhaul in March.

 

The president heralded Thursday's vote, saying Wall Street efforts to undermine the legislation had failed.

 

"Our goal is not to punish the banks," he said, "but to protect the larger economy and the American people from the kind of upheavals that we've seen in the past few years. Today's action was a major step forward in achieving that goal."

 

The bill calls for new ways to watch for risks in the financial system and makes it easier to liquidate large failing financial firms. It also writes new rules for complex securities blamed for helping precipitate the 2008 economic crisis, and it creates a new consumer protection agency.

 

Three Republicans — Sen. Scott Brown of Massachusetts and Maine Sens. Olympia Snowe and Susan Collins — voted for the bill. Two Democrats — Sens. Russ Feingold of Wisconsin and Maria Cantwell of Washington — voted with Republicans against the measure.

 

At least two contentious amendments remained before the Senate could vote to approve the sweeping bill. Senate Majority Leader Harry Reid, D-Nev., expressed hope of completing the legislation later Thursday.

 

Democrats succeeded by winning Brown's backing. The Massachusetts Republican voted against ending debate on Wednesday after indicating he planned to vote in its favor. Without his vote, and with Democratic Sen. Arlen Specter absent, the bill temporarily stalled.

 

Brown met with Reid Thursday morning, however, to voice his concerns regarding the bill's effect on Massachusetts banks such as State Street and insurance firms like MassMutual. House Financial Services Committee chairman Barney Frank, also of Massachusetts, weighed in Thursday with letters to Reid offering his own guarantees that the final bill would resolve Brown's concerns.

 

In a statement, Brown said: "I supported moving the financial bill forward today because I received assurances from Senator Reid and his leadership team that the issues related to Massachusetts in the financial reform bill will be fixed before it is signed into law."

 

Cantwell and Feingold continued to object to the bill. Cantwell protested her inability to get a vote on an amendment that she said would toughen regulation of complex securities known as derivatives. Feingold has said the bill does not go far enough to rein in Wall Street.

 

Two amendments stood between the bill and final passage. One would ban commercial banks from carrying speculative trades with their own money. The other would exempt auto dealers from oversight of a new consumer protection bureau.

 

Senators faced a complicated calculation on the bank trading and the auto dealer amendments. The trading proposal, if passed, would be added to the auto dealer measure.

 

Support for each measure, however, comes from different factions in the Senate, with some overlap. That meant that senators who want to exclude car dealers from the rules of a consumer protection bureau, mostly Republicans, would have to accept the bank trading limits, a mostly Democratic proposal.

 

The Obama administration on Thursday expressed support for the trading restriction, but said it would accept its demise if it meant killing an auto dealer measure it opposes.