BackWall Street bill nears the finish line in Congress
Wall Street bill nears the finish line in Congress
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Washington: The broadest overhaul of US financial rules since the Great Depression is likely to clear a crucial hurdle in Congress on Thursday, paving the way for President Barack Obama to sign the measure into law.
Democrats are expected to muster the 60 votes they need -- if just barely -- to advance the legislation in a vote likely to take place around 11a.m.
Final approval in Congress could come soon after, though Republicans who oppose the measure could delay a final vote until Friday evening.
The House of Representatives has already approved the bill, which tightens regulation across the financial industry in an effort to avoid a repeat of the 2007-2009 financial crisis.
With Republicans poised for big gains in the November congressional elections, Democrats are eager to show voters that they are cracking down on an industry that touched off the worst recession in 70 years.
The bill “substantially reduces the risk the financial markets will cause the economy to implode again, and it empowers consumers and small businesses to make better financial choices", Democratic Senator Dick Durbin said on the Senate floor on Wednesday.
It is not clear whether voters will give them credit.
Nearly half of those surveyed in a Bloomberg poll released on Tuesday believe the bill will do more to protect the financial industry than consumers, while only 38% believe it will protect consumers more.
A Washington Post/ABC News poll also released on Tuesday found 50% disapproving of the way Obama has handled financial reform, with 44% approving.
The bill has also won Democrats few friends on Wall Street as wealthy donors have started to steer more campaign contributions to Republicans.
Few corners of industry untouched
The Dodd-Frank bill -- named for chief authors Senator Christopher Dodd and Representative Barney Frank -- leaves few corners of the financial industry untouched.
Mortgage brokers, student lenders and other financial firms would have to answer to a new consumer-protection authority, though auto dealers will escape scrutiny.
Regulators will have new power to seize and dismantle troubled firms and impose leverage limits on firms that threaten financial stability.
Large banks would face new limits on risky trading activities, and many would have to set aside more capital to help them ride out times of crisis.
Large private-equity and hedge funds will face more scrutiny from federal regulators, and credit-rating agencies could potentially see their entire business model upended.
Much of the $615 trillion over-the-counter derivatives market will be routed through more accountable and transparent channels, and banks would have to spin off the riskiest of their swaps clearing desk operations.
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