Major Banking Bill Faces Final Vote This Week

Associated Press + More

WASHINGTON — President Barack Obama on Tuesday secured the 60 votes he needs in the Senate to pass a sweeping overhaul of financial regulations, all but ensuring that he soon will sign into law one of the top initiatives of his presidency.

With the votes in hand to overcome Republican delaying tactics, Senate Majority Leader Harry Reid on Tuesday took steps to end debate on the bill Thursday, setting the stage for final passage perhaps later in the day. The House already has passed the bill. [See who donates the most money to Reid's campaign.]

"This reform is good for families, it is good for businesses, it's good for the entire economy," Obama said as he prodded the Senate to act quickly.

Passage would represent a signature achievement for the president just four months after he signed massive health care legislation into law. The final vote comes amid lingering public resentment of Wall Street, but the legislation's symbolic and political impact is likely to be diminished by anxiety across the country over jobs and the economy.

Reid as much as acknowledged that political reality Tuesday, blaming "greed on Wall Street" for the country's economic troubles.

"It triggered the recession," he said. "It's what suffocated the job market and robbed trillions of dollars of people's savings — trillions."

Support for the bill jelled Tuesday after conservative Democratic Sen. Ben Nelson of Nebraska announced he would vote for the bill after raising concerns the previous day.

Obama noted that the bill is getting backing from Republican Sens. Scott Brown of Massachusetts and Olympia Snowe and Susan Collins, both of Maine. Snowe and Brown announced their support on Monday.

"Three Republican senators have put politics and partisanship aside to support this reform, and I'm grateful for their decision," Obama said as he announced his nomination of Jacob Lew to be the new director of the White House budget office.

The 2,300-page bill aims to address regulatory weaknesses blamed for the 2008 financial crisis that fueled the worst recession since the 1930s.

It gives regulators broad authority to rein in banks, limit risk-taking by financial firms and supervise previously unregulated trading. It also makes it easier to liquidate large, financially interconnected institutions, and it creates a new consumer protection bureau to guard against lending abuses.

While Democrats are ready to cast the GOP as an ally of Wall Street, Republicans have portrayed the bill as government overreach that would make lending more expensive, increase costs for consumers and hurt U.S. businesses. Republicans repeatedly and fruitlessly tried to expand the bill to include changes to government-controlled mortgage finance giants Fannie Mae and Freddie Mac.

"The vast majority of our members felt that it was not a step in the right direction, that it perpetuated too-big-to-fail, that it was supported by Goldman Sachs and opposed by our community banks," Senate Republican leader Mitch McConnell of Kentucky said. [See who donates the most money to McConnell.]

A trade association representing community bankers, however, circulated a memo Tuesday saying some criticism that the bill would harm small banks "is so extreme it practically implies the end of life as we know it."

The commentary from top Independent Community Bankers Association officials Jim MacPhee, Mike Menzies and Sal Marranca argues that the bill contains important exemptions for smaller institutions.

"Some of those provisions will directly benefit community banks' bottom lines. Others are designed to buffer community banks from the actions lawmakers were intent on taking to rein in the megabanks and nonbank financial firms," they wrote to association members.

Senate Banking Committee Chairman Christopher Dodd, D-Conn., who helped write much of the bill with House Financial Services Committee Chairman Barney Frank, said the Senate had arrived at a "historic moment," and urged senators to "set up a regulatory structure that makes it possible for us to address future economic crises, as certain as they will occur."