PoliticsUSA: Banks: House of Representatives passes bill regulating banks and finance, Senate mum

MarketWatch's Ronald D. Orol sends out this Market Pulse alert, "House approves sweeping bank reform bill" (June 30, 2k10, 6:54 p.m. EDT):

After making changes to appease moderate Republicans in the Senate, the House on Wednesday approved the most significant shake-up of the regulation of U.S. banks since the Great Depression by placing new restrictions on the nation's biggest banks, reining in the Federal Reserve and crafting a major new consumer-protection division for mortgage and credit-card products. The mammoth legislative package -- which passed 237 to 192 - moves the Obama administration one step closer to having a significant triumph in its efforts to reign in Wall Street after a financial crisis that shook the economy to the brink in Sept. 2008. The legislation, which is a combination of House and Senate bank bills, must still receive a filibuster-proof 60 votes to pass in the Senate. A Senate vote isn't expected until the week of July 12. The bill had almost no GOP backers.

Americans need some reform of lax regulation immediately, so let's hope that the Senate confirms, as this House version simply ratifies the negotiation results of a joint committee of the two Houses of Congress.  The Senate now needs to adopt the same text approved by its delegates on the joint committee, after approval by the Senate the bill becomes ready for the Prez's signature.

Senate support for the far-reaching bill remained in flux, however. The Senate was forced to delay its vote to mid-July, denying President Barack Obama a victory before Independence Day. Democrats struggled to secure the votes of a handful of Republican senators even after meeting their demands and backing down on a $19 billion tax on big banks and hedge funds.   Read more ...




The legislation, swelling to more than 2,000 pages, would rewrite the nation's regulatory books. Simple supermarket purchases and exotic derivatives trades would be subject to new laws. And the entire financial system would be placed on a risk watch in hopes of thwarting the next threat of a financial crisis.

Obama hailed the vote as "a victory for every American who has been affected by the recklessness and irresponsibility that led to the loss of millions of jobs and trillions in wealth."

The 237-192 House tally broke largely along party lines but attracted more support than in December when no Republicans voted for the House version of the bill. The new legislation combines the House bill with one passed by the Senate last month.

"Today, I rise with a clear message that the party is over," House Speaker Nancy Pelosi declared. "No longer again will recklessness on Wall Street cause joblessness onMain Street. No longer will the risky behavior of the few threaten the financial stability of our families, our businesses and our economy as a whole."

Republicans portrayed the bill as a vast overreach of government power that would do little to prevent future bailouts of failing financial institutions. They complained that it failed to place tighter restrictions on Fannie Mae and Freddie Mac, the mortgage giants forced into huge federal bailouts after their questionable lending helped trigger the housing and economic meltdowns.

"This legislation is a clear attack on capital formation in America," said Rep. Eric Cantor of Virginia, the second-ranking House Republican. "It purports to prevent the next financial crisis, but it does so by vastly expanding the power of the same regulators who failed to stop the last one."

Only three Republicans voted for the bill: Joseph Cao of Louisiana, Mike Castle of Delaware and Walter Jones of North Carolina. Nineteen Democrats voted against it, eight fewer than in December.

As predictable as the House vote may have been, the Senate was a study in unpredictability.

As with the new Healthcare Law, the bill is engineered by the Democrat majority that overall controls the committee system in both Houses.  So, the bill's "behavior" is marred by several Dem fetishes, just as with Healthcare. Regarding bank & financial reform, with tuffer regulation,  I'm not sure why Repub Senators are holding back their votes that shoud be cast for strong regulatory reform, but if they scuttle increased bank regulation because of their own fetishes,*  they won't be serving the American people either.

excessive" (WaPo) the bill's envisioned new legislation intended to restrain banks and financial firms from making themselves a law unto themselves and for themselves. But perhaps the new financial law is excessive, how coud I know?

What I woud hate to see, in any case, is another round of the unregulated financial practices in dear old USA; before the Near-Crash of late 2008, was it?,  hate to see a repeat of the widening of the different kinds of activities that banks with depositors and customers have been allowed to expand into, pursuing bottom-line greater profits -- often in conflict with their responsiblities to everyday customers.  No!, I did not say "investors," a company is not only its owners.  A company has a responsiblity to its Chief Executive Officer,  its Board of Directors, its workforce (best represented by a pluralistic array of principially-different parallel unions required to negotiate with one another and with management).  The Canadian system is said to be a well-regulated, and well-monitored, and well-enforced banking and financials industry.

-- Politicarp