The House has approved landmark oversight reform of financial institutions, but a vote on the consolidated bill in the Senate has been postponed until later in July.
House lawmakers Wednesday voted 237 to 192 to approve the negotiated version of reform after several days of deals by a House-Senate conference committee.
Three Republicans joined 234 Democrats in approving the legislation. No Republicans voted for the initial House version of reform in December.
The regulatory overhaul includes a controversial Consumer Financial Protection Bureau with independent authority – but housed within the Federal Reserve.
Critics fear the new overseer of mortgages and credit cards will further constrict credit availability by standardizing loan products. But President Obama and most Democrats joined consumer watchdog groups in pushing for a dedicated entity to protect borrowers from deceptive credit card practices and the type of mortgage underwriting tactics that fueled the Housing market collapse.
But the last-minute roadblock in the Senate came from the president’s proposal for a fee on banks with more than $50 billion in assets and hedge funds with more than $10 billion in assets.
The fee would have collected $19 billion to offset the reform bill’s cost. But some centrist Republicans objected to the fee, including Sen. Scott Brown, R-Massachusetts, one of four Republicans who voted for the Senate’s initial version of the financial overhaul bill.
The House-Senate panel Tuesday revised the bill, dropping the fee and ending the government’s bailout program, Troubled Asset Relief Program, TARP, ahead of schedule. TARP’s early termination would provide leftover funds to help pay for the reform bill.
In addition, the panel approved a measure that raises the premiums banks pay the Federal Deposit Insurance Corp.
The move away from the bank fee may garner the necessary votes for passage in the Senate, including Sen. Susan Collins, R-Maine, who said yesterday that she was leaning toward support the final bill. Two other Republican senators, Olympia Snow, of Maine, and Charles Grassley, of Iowa, are likely to support the reform.
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