Senate Passes Financial Reform Bill

By a partisan vote of 59-39, the Senate has passed its sweeping financial reform bill.

The legislation aims to prevent a recurrence of the near-meltdown of big Wall Street investment banks and the resulting costly bailouts. It calls for new ways to watch for risks in the financial system and makes it easier to liquidate large failing financial firms. It also writes new rules for complex securities blamed for helping precipitate the 2008 economic crisis, and it creates a new consumer protection agency. It would impose new restraints on the largest, most interconnected banks and demand proof that borrowers could pay for the simplest of mortgages.

"Our goal is not to punish the banks but to protect the larger economy and the American people from the kind of upheavals that we've seen in the past few years," Obama said earlier Thursday after the Senate cleared a key 60-vote hurdle blocking final action. The financial industry, Obama said, had tried to stop the new regulations "with hordes of lobbyists and millions of dollars in ads." Two Democrats, Sens. Maria Cantwell (D-WA) and Russ Feingold (D-WI), voted against the bill. Four Republicans, Sens. Scott Brown (R-MA), Olympia Snowe (R-ME), Susan Collins (R-ME), and Chuck Grassley (R-IA), voted in favor of the bill.

A House version of the bill passed in December and now must be reconciled with the Senate version.