The U.S. Senate has announced the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act (HR 4173) by a vote of 60-39. The 2,300-plus-page bill, HR 4173, will address the problems that led to the nation's economic collapse, will add new regulators to analyze any potential economic crisis situations in the future; create a federal bureau in charge of consumer protection; and adopt new regulations designed to end the practices that contributed to the American economic downturn.
"No longer will the recklessness on Wall Street of some cause joblessness on Main Street for the many," said Rep. Nancy Pelosi (D-CA). "The party is over. No longer will we be privatizing the gain and nationalizing the risk."
"It is not a perfect bill, I will be the first to admit that," said Sen. Dodd. "We don't know ultimately how well the ideas we've incorporated here will achieve the results we desire. It will take the next economic crisis, as certainly it will come, to determine whether or not the provisions of this bill will actually provide this generation or the next generation of regulators with the tools necessary to minimize the effects of that crisis when it happens."
According to a study by the U.S. Chamber of Commerce on the new bureaucratic landscape under this bill:
►70 new federal regulations through the new Bureau of Consumer Financial Protection
►54 new federal regulations through the U.S. Commodity Futures Trading Commission
►11 new federal regulations through the Federal Deposit Insurance Corp
►30 new federal regulations through the Federal Reserve
►205 new regulations through the Securities and Exchange Commission
“This bill grew out of a bill that was meant to rein in Wall Street, but which is now supported by some of Wall Street’s biggest banks and opposed by the small community banks in my state; a bill that’s meant to help the economy, but which is widely expected to stifle growth and kill more jobs in the middle of a deep recession, and a bill that, according to the papers, a vast majority of Americans don’t think will work," said Senate Minority Leader Mitch McConnell (R-KY) in his opposition to the bill. "All told, this bill would impose 533 new regulations on individuals and small businesses; regulations that will inevitably lead to the kind of confusion and uncertainty that will make it even harder for struggling businesses to dig themselves out of the recession."
Senate Majority Leader Harry Reid (D-NV), and Sen. Christopher Dodd (D-CT), chairman of the Senate Banking, Housing and Urban Affairs Committee, had been struggling to round up the 60 votes needed to get a bill to the floor in the Senate.
“When you go to any of the great casinos across Nevada and put your chips on the table, you’re gambling with your own money," said Sen. Reid. "You win, you win. And if you lose, you lose. But Wall Street rigged the game. They put our money on the table. When they won, they won big. The jackpots they took home were in the billions. But when they lost— and boy, did they lose big—they came crying to the taxpayers for help. We want to make sure this disaster never happens again. The solution has to start here."
"Today represents a significant milestone in the history of financial regulation in the United States," said Federal Deposit Insurance Corporation (FDIC) Chairman Sheila C. Bair. "With the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act, a meaningful framework is now in place that addresses many of the weaknesses in our financial system that led to the financial crisis. The legislation will enforce market discipline by making clear that shareholders and creditors bear the losses for the risks they take. It also will protect taxpayers by empowering the government with the means to end Too-Big-to-Fail and providing substantial new protection to consumers and the financial system. The responsibility now shifts to regulators to implement this law in a manner that is aligned with its principles."
The bill heads next to the desk of President Barack Obama for his signature.