This vote was on a bill that would overhaul regulation of the financial services industry. The bill would create new regulatory bodies to assess the risk posed by very large financial institutions and also would help break up very large firms that are failing. Consumer financial products would be overseen by a new agency the bill would create. It also would bring stiff oversight, for the first time, to complex financial instruments of the sort that has been partly blamed for the financial meltdown. It also would allow federal regulators and company shareholders more say over executive compensation packages.
Daniel Akaka, D-Hawaii, said the bill is intended to protect individual consumers and small businesses and also large financial institutions alike from falling into ruin, and noted how important it is for the least of the society to have access to secure banking.
“I grew up in a family that did not have a bank account. My parents kept their money in a box divided into different sections so that money could be separated for various purposes. Church donations were kept in one part. Money for clothes was kept in another and there was a portion of the box reserved for food expenses. When there was no longer any money in the food section, we did not eat. Obviously, money in the box was not earning interest. It was not secure. I know personally the challenges that are presented to families unable to save or borrow when they need small loans to pay for unexpected expenses. Unexpected medical expenses or a car repair bill may require small loans to help working families overcome these obstacles,” Akaka said. “Essential consumer and investor protections for working families are included.. A regulatory structure that will have a greater emphasis on investor and consumer protections is established. Regulators failed to protect consumers and that contributed significantly to the financial crisis. Prospective homebuyers were steered into mortgage products that had risks and costs that they could not understand or afford. The Consumer Financial Protection Bureau will be empowered to restrict predatory financial products and unfair business practices in order to prevent unscrupulous financial services providers from taking advantage of consumers.”
Richard Shelby, R-Ala., said the bill is a partisan document and that it will not be an effective way to regulate the financial industry.
“After the crisis, which cost trillions of dollars and millions of jobs, it was clear that significant reform was necessary. Despite broad agreement on the need for reform, the majority decided it would rather move forward with a partisan bill. The result is the 2,300-page legislative monster before us that expands the scope and the power of ineffective bureaucracies. It creates vast new bureaucracies with little accountability and seriously undermines the competitiveness of the American economy,” Shelby said. “Unfortunately, the bill does very little to make our financial system safer.”
By a vote of 60-39, the bill was passed. All but one Democrat present voted for the bill. All but three Republicans present voted against the bill. The end result is that the Senate passed a bill that would overhaul regulation of the financial services industry and create new consumer protections. Because the House had already passed the bill, this vote sent it to President Obama.