Nearly two years after the economic meltdown in fall 2008, the U.S. Senate voted Thursday to approve a sweeping financial reform bill aimed at the reckless Wall Street investors who caused the crisis.
The Senate voted 60-39 to pass the reforms sought by President Obama. Three Republicans — Scott Brown of Massachusetts, along with Susan Collins and Olympia Snowe of Maine — joined Democrats in supporting the bill.
A sole Democrat, Russ Feingold of Wisconsin, was opposed; he preferred stronger regulations.
Among other items, the bill establishes a formal procedure for the federal government to identify, take over and dismantle failing financial firms. Also, it regulates the derivatives market and provides broader protections to consumers on terms for credit cards, mortgages and student loans.
Perhaps unsurprisingly, various consumer advocacy groups and labor unions praised the bill, while Republicans and Wall Street bankers criticized it.
House Minority Leader John Boehner (R-West Chester) wants to repeal the bill if the GOP gains a majority in Congress after this November's elections.
At a press conference Thursday, Boehner said, “I think it ought to be repealed,” responding to a question from a Talking Points Memo reporter.
Boehner has said he opposes the bill because it “institutionalizes” taxpayer-funded bailouts of failing financial firms. But FactCheck.org replied that simply isn't the case.
“No piece of legislation can guarantee that a future Congress won’t allow the federal government to prop up a failing financial institution,” Fact Check stated. “But claims that this bill makes taxpayer-funded bailouts a permanent fixture are misleading, to say the least.
“The main point of contention is a provision that calls for a $50 billion fund to be used to liquidate a bank that’s on the verge of collapse. The bill does not authorize use of the fund to prop up companies or bail them out. Rather, it would be used to keep a troubled company operating long enough for the Federal Deposit Insurance Corporation to dismantle it.”
FactCheck added, “Furthermore, while critics speak of 'taxpayer-funded bailouts,' the fund in question isn’t financed by ordinary taxpayers at all. The bill requires banks and financial institutions to fund it, and replenish it if funds are used … the bill says that would include removing the management of the company and making sure shareholders don’t get any money until other claims are paid.”
The Cincinnati AFL-CIO Labor Council strongly supports the bill, and blasted U.S. Sen. George Voinovich (R-Cleveland) for voting against it.
“Yesterday’s vote on comprehensive financial reform was a historic victory for working people against the Big Banks,” said Douglas Sizemore, the local AFL-CIO's treasurer. “Unfortunately, Sen. Voinovich stood on the side of Wall Street by voting against reform. Millions of workers lost their jobs and still cannot find work because of the reckless and selfish actions of Wall Street and the big banks, yet Sen. Voinovich supported keeping the status quo.
“It’s outrageous that after Wall Street’s greed caused the economic crisis and destroyed millions of jobs, all but three Republicans in the U.S. Senate voted against holding Big Banks accountable and making them pay for their decisions,” Sizemore added.