Washington The House passed the most ambitious restructuring of federal financial regulations since the New Deal on Friday, aiming to head off any replay of last year’s Wall Street failures that plunged the nation deep into recession.
The sprawling legislation would give the government new powers to break up companies that threaten the economy, create a new agency to oversee consumer banking transactions and shine a light into shadow financial markets that have escaped the oversight of regulators.
The vote was a party-line 223-202. No Republicans voted for the bill; 27 Democrats voted against it.
While a victory for the administration, the legislation dilutes some of President Barack Obama’s recommendations, carving out exceptions to some of its toughest provisions. The burden now shifts to the Senate, which is not expected to act on its version of a regulatory overhaul until early next year.
The president praised the House action Friday, and called on Congress to act swiftly to get the bill to the White House for his signature.
“The crisis from which we are still recovering was born not only of failure on Wall Street, but also in Washington,” Obama said. “We have a responsibility to learn from it and to put in place reforms that will promote sound investment, encourage real competition and innovation and prevent such a crisis from ever happening again. “
The legislation would govern the simplest payday loan and the most complicated high-finance trades. In its breadth, the measure seeks to impose restrictions on every house of finance, from two-teller neighborhood thrifts to huge interconnected conglomerates.
Democratic leaders had to fend off a last-minute attempt to kill a proposed consumer agency, a central element of the legislation and one the features pushed by the White House. The agency would take over consumer protection powers from current banking regulators, and big banks and the U.S. Chamber of Commerce vigorously opposed the idea.
Democrats said the broad legislation would help address problems that led to last year’s calamitous financial crisis. Republicans argued that it overreached and would institutionalize bailouts for the financial industry.
“Let’s put it to the American people: Do you prefer the Republican position of doing literally nothing to rein in these abuses or should we try to rein them in?” Rep. Barney Frank, who led the Democratic effort on the bill, asked moments before the final vote.
Republicans cast the regulatory bill as a burden to business and argued that it would continue to protect companies considered too big to fail.