The bill, which passed 223-202, imposes more oversight and stronger capital cushions for the largest banks and Wall Street firms. It forces them to pay a total of as much as $150 billion into an emergency fund that could be tapped when a troubled firm needs to be taken over and broken up.
The legislation also calls for the regulation of some derivatives and creates a new Consumer Financial Protection Agency to regulate products such as credit cards and mortgages.That's the good news.
"The bailouts of AIG and Bear Stearns would be not possible -- made illegal -- under this bill," Rep. Barney Frank, D-Mass., chairman of the House Financial Committee, said Wednesday as debate started on the bill. "If a company fails, it'll be put to death."
The House rejected, by 223-208, an amendment that would have effectively killed the Consumer Financial Protection Agency, replacing it with a council of existing regulators.
Here's the bad news.
The members also voted down, by 241-188, an amendment that would have given bankruptcy judges new powers to lower balances on mortgages in order to prevent homeowners from losing their homes in foreclosure.
On the Senate side of Capitol Hill, the bill is moving much more slowly and final passage is likely months away.Cramdown didn't even make it out of the House this time. And the Senate is talking about having this bill done by April, which means the GOP will make sure this bill never passes as they will delay, delay, delay until election season and then blame the Democrats for not being able to get things done.
We've seen this all before. The bill will be watered down in the Senate to the point of fecklessness and then the Dems will put Obama in the position of having to sign a crappy bill he did nothing to help along.