Finally reacting to public anger on Wall Street’s undeniable role in ushering in the nation’s fiscal downturn and subsequent bail-outs, on Thursday the Senate passed the stiffest financial reform package since the 1930s.
The legislation — which must now be reconciled with last December’s House version — passed on a 59-39 vote.
Titled The Restoring American Financial Stability Act of 2010, the Senate legislation was largely shepherded by Arkansas Sen. Blanche Lincoln, chairman of the Senate Agriculture Committee.
“This historic legislation is about more than just changing the way Wall Street does business,” said Lincoln after the bill’s passage. “It’s about helping families save for college, protecting retirees, ensuring small businesses can get loans and creating new jobs on Main Street.
“As chairman of the Senate Agriculture Committee, I was proud to craft the bill’s strong derivatives title. My legislation brings a $600 trillion market into the light of day and ends the days of Wall Street’s backroom deals. These strong reforms will rein in the greedy behavior that nearly destroyed our economy, hurting Arkansas small businesses and costing millions of Americans their jobs.
“I will continue to stand up to Wall Street lobbyists and special interest groups to advocate for these reforms as we work to get this bill signed into law.”
There were several surprises with the Senate bill’s passage. Chief among them: the bill wasn’t watered down prior to the body’s vote.
With a massive lobbying effort by banking interests (a new study by the Center for Public Integrity estimates over $1 billion and over 3,000 lobbyists were allocated by the financial sector while the bill was being written), it was expected that immediately following May 18 primaries Senate Democrats would make the bill more banker-friendly. Since that didn’t happen, taxpayers will now see if bankers get their way during the House/Senate reconciliation process. Whatever the final legislation looks like, it is expected President Obama will have a bill to sign by July 4.
Among other things, the Senate bill contains rules governing derivatives trading, derivatives clearinghouses, ratings reform, resolution authority, and bulked up consumer protections.