The Senate voted last week to approve a historic financial regulatory reform bill that would make sweeping changes in how the financial system is regulated.

The 59 to 39 vote came after the Senate voted to close off debate earlier in the day, even with hundreds of amendments still pending. Some of those amendments may still be taken up when House and Senate negotiators meet to reconcile the two versions of the bill. The House passed its version last December.

President Obama hailed passage of the bill, his main legislative priority following passage of the health care reform legislation. "Over the past year, the financial industry has repeatedly tried to end this reform with hoards of lobbyists and millions of dollars of ads," he said. "When they couldn't kill it, they tried to water it down. Taxpayers will never again be asked to foot the bill for Wall Street's mistakes. There will be no more taxpayer-funded bailouts. Period."

Senate Banking Committee Chairman Christopher Dodd, D-Conn., who introduced the legislation, has talked about introducing a Manager’s Amendment that could contain some of the proposed amendments, but any changes would likely have to be added during the conference committee process. Senate Majority Leader Harry Reid, D-Nev., and the Obama administration have pushed for quick passage of the bill in order to complete other Senate business, including approval of funding for the military, before recess.

Most Republicans voted against the bill. "This bill is flawed," said Sen. Richard Shelby, R-Ala., ranking member of the Senate Banking Committee. "This bill promises more government, more costs, slower economic growth, and fewer jobs. It threatens privacy rights and fails to address crucial elements of the recent crisis."

Four Republican senators joined the majority of Democrats in voting to approve the bill: Scott Brown of Massachusetts, Charles Grassley of Iowa, and Olympia Snowe and Susan Collins of Maine. Two Democrats whose amendments had not yet been considered voted against the bill: Russ Feingold of Wisconsin and Maria Cantwell of Washington. Cantwell had wanted to close loopholes in the regulation of derivatives of trading. She and Feingold also wanted to re-impose Glass-Steagall-like barriers between investment banking and commercial banking.

Treasury Secretary Timothy Geithner praised the passage of the bill, S.3217, the Restoring American Financial Stability Act of 2010.

“Today we stand closer than ever to enacting meaningful financial reform that will benefit every American family and business, help improve the competitiveness of our financial markets, and strengthen the safety and soundness of our financial system,” he said in a statement. “I commend Chairman Dodd and Majority Leader Reid for their tremendous leadership in passing the Restoring American Financial Stability Act of 2010. Today’s bipartisan vote follows many months of hard work. The House and Senate have now each passed strong bills that protect consumers, limit risk-taking by large institutions, and addresses the problem of ‘too big to fail.’ As we move ahead, I look forward to working with the House and Senate to produce a sensible, prudent reform bill that strengthens the American financial system and preserves our ability to innovate and compete in a global economy.”

The bill would create a Consumer Financial Protection Bureau within the Federal Reserve, instead of the standalone Consumer Financial Protection Agency that is in the version of the bill that was approved by the House last December. Public accountants would be exempted from regulation by either the bureau or the agency.

The bill provides the SEC and the Commodity Futures Trading Commission with authority to regulate over-the-counter derivatives. Derivatives would have to trade over regulated exchanges and be cleared through central clearinghouses.

The Sarbanes-Oxley Act would be amended to authorize the Public Company Accounting Oversight Board to share certain information with foreign authorities, and to give the PCAOB the ability to regulate auditors of brokers and dealers.

The bill would also streamline bank supervision by eliminating the Office of Thrift Supervision. The Federal Deposit Insurance Corp. would regulate state banks and thrifts of all sizes and bank-holding companies of state banks with assets below $50 billion. The Office of the Comptroller of the Currency would regulate national banks and federal thrifts of all sizes and the holding companies of national banks and federal thrifts with assets below $50 billion. The Federal Reserve would regulate bank and thrift holding companies with assets of over $50 billion. The legislation would leave in place the state banking system that governs most community banks.

Hedge funds would be required to register with the SEC as investment advisors and provide information about their trades and portfolios necessary to assess systemic risk. This data would be shared with a systemic risk regulator, and the SEC would report to Congress annually on how it uses this data to protect investors and market integrity.

Shareholders would be given a say on pay with the right to a non-binding vote on executive pay at public companies. The legislation also gives the SEC authority to grant shareholders proxy access to nominate directors, and requires directors to win by a majority vote in uncontested elections. To be listed on an exchange, compensation committees would need to include only independent directors. They would have the authority to hire outside compensation consultants.

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