This was a vote on passage of a conference report on financial regulatory reform legislation.
The House and Senate had passed different versions of financial regulatory reform legislation, which was intended to prevent the kind of financial crisis that had recently occurred in the fall of 2008. When the two Houses of Congress pass different versions of the same bill, a final version is typically negotiated in a conference between a limited number of members of both bodies, and a conference report is developed. Both Houses then must pass that report before it is sent to the president to be signed into law. Under House rules, conference reports cannot be amended.
The conference report created a new Consumer Financial Protection Agency to protect consumers from risky and abusive financial practices, provided for an audit of the Federal Reserve, strictly limited the extent to which banks could invest in hedge funds, and gave the federal government the authority to regulate sensitive financial instruments known as “derivatives.” The audit of the Federal Reserve, however, only applies to loans made by the Fed during the financial crisis. (A number of members, including Rep. Ron Paul (R-TX), had proposed a much broader and controversial proposal to audit the Federal Reserve.)
Rep. Paul Kanjorski (D-PA) urged support for the conference report: “…The conference report represents a reasoned, middle ground that strikes an appropriate balance and does what we need it to do. It ends the problem of too-big-to-fail financial institutions, effectively regulates the derivatives products which some have referred to as financial weapons of mass destruction, and it greatly strengthens investor protections.”
Rep. Carolyn Maloney (D-NY) argued the conference report was “landmark legislation which will protect consumers and investors while allowing our financial services industry to continue financing the creativity and innovation which has, even in these very difficult times, made the American economy the envy of the world. This bill restores safety and soundness, reduces the likelihood of another systemic crisis, restores faith and confidence in our institutions and markets, while safeguarding Americans from predatory, unfair, and deceptive practices.”
Rep. Mike Pence (R-IN) urged opposition to the measure: “Under the guise of financial reform, Democrats today are pushing yet another bill that will kill jobs, raise taxes, and make bailouts permanent. Let me say that again. This legislation will kill jobs by restricting access to credit, it will kill jobs by raising taxes on those that would provide loans and opportunity to small business owners and family farmers, and it makes the bad ideas of the Wall Street bailout permanent.”
Rep. Eric Cantor (R-VA) criticized the conference report: “This legislation is a clear attack on capital formation in America. 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.”
The House passed the conference report by a vote of 237-192. 234 Democrats – including a majority of progressives – and 3 Republicans voted “yea.” 173 Republicans and 19 Democrats voted “nay.” As a result, the House passed a conference report on major financial regulatory reform legislation intended to prevent the kind of economic crisis that occurred in September 2008. With the legislation having passed the House, Senate passage would clear it for President Obama’s signature.