Senate Passes Financial Reform Bill

After months of deliberation and failed cloture votes, the Senate finally garnered enough support to proceed with a vote on 1,500 pages of financial regulatory reform legislation. Final passage occured last night with a vote of 59-39. Four Republicans (Senators Snowe, Collins, Grassley, and Brown) voted yes and two Democrats (Senators Cantwell and Feingold) voted no.

NTU did not support this bill for a multitude of reasons. We all want reform, but this is not the right reform. It's a flawed and incomplete package that would unduly expand the federal government's regulatory power over our increasingly threatened free market. We distributed a vote alert in opposition, as well as an NTU-led coalition letter signed by 21 state and national groups.

I have discussed specific provisions of the legislation in previous posts, but here's another snapshot:

The bill would create a Bureau of Consumer Financial Protection with a politically-appointed "credit czar," and would establish a Financial Stability Oversight Council with authority to regulate systemic risk (thereby codifying "too big to fail" into law). Furthermore, the financial reform bill does nothing to rein in Fannie Mae and Freddic Mac - the two government-sponsored enterprises that caused much of the financial crisis we currently face. In the vote alert, I mention that CBO predicts American taxpayers will spend $369 billion to bail out Fannie and Freddie by 2019. It is absolutely inexcusable for lawmakers to ignore this burden on taxpayers by neglecting to directly address and reform the housing giants.

The financial reform bill will now move to a House-Senate conference committee. I'll be sure to keep you apprised of any new developments.