House OK’s Wall Street Reform: Senate After July 4

by Mike Hall, Jul 1, 2010

The House last night gave its final approval to a package of sweeping Wall Street reform measures that is an important step to changing the rules of the game that caused the financial meltdown, for which working families are still paying the price.

House Speaker Nancy Pelosi (D-Calif.) says the bill, the Dodd-Frank Wall Street Reform and Consumer Protection Act, will usher in

an era of transparency for our financial markets, tough oversight of Wall Street, and strong consumer protections on Main Street.

Last night’s vote came after negotiators from the House and Senate put the finishing touches on the conference report that melded bills each chamber had passed earlier. Three Republicans broke ranks with their leadership which opposed the Wall Street reforms and joined in the 237-192 vote.

The Senate had been expected to act before the July 4 recess, but the conference report must first clear a 60-vote hurdle. With the recent death of Sen. Robert C. Byrd (D-W.Va.) and opposition to the reform legislation from most Republican Senators, the Senate is likely to wait until it returns.

While Republican lawmakers and Wall Street lobbyists fought hard against the Wall Street reform package, Main Street working families rallied around the effort rein in Wall Street’s worst practices.

In April, more than 15,000 people marched on Wall Street and last month thousands more marched on K Street in Washington, D.C., demanding Wall Street reform. They also generated tens of thousands of e-mails and phone calls and rallied outside banks and Wall Street financial institutions. Such mobilization helped ensure that many of the Wall Street reforms working families advocated are in the final product.

The bill includes new rules on how banks handle derivatives. Derivatives are the complex and risky financial products developed by Wall Street and Big Banks that were at the heart of the financial collapse. The bill regulates banks’ hedge fund operations, gives shareholders more of a say on corporate governance

It also creates a Consumer Financial Protection Bureau to rein in subprime mortgages, payday lending and abusive credit practices. The bill also protects taxpayers from footing the bill for failing financial institutions by giving government regulators the authority to liquidate the companies by breaking them apart, selling assets and forcing creditors and shareholders to take losses—not the taxpayers.

Heather Booth, director, Americans for Financial Reform, said that despite the millions spent by corporations and the army of Wall Street lobbyists they sent to Capitol Hill:

Main Street has come out ahead…The House of Representatives sent a strong message today to the Big Banks—it is no longer acceptable to gamble with our money, to take advantage of consumers for sport or to hide risky investments in the shadows.

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