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Senate Passes Historic Financial Overhaul Reform Bill

May 25, 2010 by  

Senate passes historic financial overhaul reform billAfter barely clearing the 60-vote threshold to end debate, Senate Democrats passed a financial reform bill last week that will revolutionize the way that large banks operate.

The legislation, which now needs to be reconciled with the House version that was passed in December, will increase the role of federal regulators, establish new procedures to prevent bailouts and limit the use of derivatives, according to CNN.

"To Wall Street, it says: No longer can you recklessly gamble away other people’s money," said Senate Majority Leader Harry Reid (D-Nev.). "It says the days of too big to fail are behind us. It says to those who game the system: The game is over."

While the majority of Republicans agree that reform was necessary, most feel that the measure will negatively impact the marketplace.

"This bill doesn’t listen to the American people—it promises massive government overreach in ordinary business transactions," said Senator Richard Shelby (R-Ala.). "The decisions we’ve made will have an impact on the lives of Americans for decades to come."

Republicans leaders also heavily criticized the fact that Fannie Mae and Freddie Mac, the nation’s two largest mortgage companies, will be virtually unaffected by the new measures. Due to last year’s Federal bailout, both corporations are now government-affiliated.
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  • American liberal

    The majority of Americans favor wallstreet reform…good job Democrats…don’t let the bill be watered down….no more bailouts… No more ” to big to fail “..

    • Greg

      While reform was needed, the Democrats’ bill was the wrong bill. It largely ignored the worst financial offenders, while imposing new regulations which will hurt smaller banks and result in higher costs to consumers. It even has a provision to track personal credit card trasnactions. How’s that for more Big Brother! If this bill was supposed to help consumers at the expense of Wall Street, why were firms like Goldman Sachs behind it? For anyone who doesn’t know, Goldman Sachs was Obama’s largest corporate contributor, giving him about $1 million. They also benefited more than anyone else from the bailouts, which, by the way, can continue under the new Democrat bill. As with everything else done by this liberal Congress and Administration, it is all smoke and mirrors. They tell the people what they want to hear, but pass legislation which screws them and helps line their own pockets and those of their corporate cronies. Contrary to popular belief, big banks contribute more money to the Dems than they do to the GOP. Would they be doing that if the Dems were going to pass legislation which would hurt them? Of course not. Wake up to reality!

      • jimjimny

        Oh! come on get with it $1 million to Obama the gave the republicians $50 million a month since the bill was first proposed. Goldman wasted their money because the Republician party is not interested in anything but a victory in November. Therefore the Republicians refuse to take part in any construsive way in governing the country. They will pay a heavy price for believing Fox News

        • http://www.helpawhiteguy.com Reggie Brian

          Is it better to believe the Comedy Channel?

          • Meteorlady

            I’m pretty sure I saw the news on Comedy Central last week…. nice coverage job too.

    • Meteorlady

      Really? I favored reigning in Fannie and Freddie not watching the stock market fall like it has been. Nor is this bill fair – it has favorites among the Wall Street types.

  • Dan Burke

    Great thinking? Not! My understanding of the bill with far reaching aspects from up in Wall Street down to the loans banks can make to small business tells me something. It is not written the bill that I know of and little to do with the bill directly. What it tells me is that we are institutionalizing in our way of living and thinking the idea that there is something as “too big to fail.” Small businesses fail regularly. I think the statistic is somewhere around 95% of new businesses fail within five years. That is high. Do we bail out all these businesses? No, but we bailed out the big ones recently when we feared what would happen if they collapsed. After seeing investors have their money tossed aside for the unions in the bankruptcy of GM, do we give investors protection from the government? No, we give government more control over investors. Since we aren’t finding moderation between government and the financial industry, rather we are giving government more and more control over the finances, then I am inclined to believe that we are not stepping away from “too big to fail” and are instead making it a part of our very government. By the way, when is government “too big to fail?” If I look at Greece, the fall of the Roman Empire, the collapse of the former USSR, I am inclined to believe that government does collapse as it gets “too big to survive.” By the way, the way Rome delayed its collapse? War. Hitler’s Germany? War. So with our government getting so big, what am I inclined to believe is in our future? Take a wild guess….

    • Meteorlady

      Wait – isn’t “too big to fail” because the government allowed these companies to merge until they reached that point?

  • Dave

    While you at it AL, you may as well add “not big enough to grow” This bill does nothing but add another layer of government workers. You know, a bill that takes tax payers money and gives it to a non producing government worker. Someone that will put in the 20 years and then retire with the big retirement package that we can’t afford. While I admit there are a few good things in the bill, most of this bill is a joke.

  • JC

    I agree with the notion that there should be no bail outs of the private sector.
    But I think this bill is a two faced bill. It advertises one small aspect of what is a good idea, while sticking the tentacles of government control further into private enterprise.
    When will we learn that what is required is not more “regulation” which only stifles the economy. What we need are clear moral rules for business and “zero” government involvement.
    If an individual, company or corporation are found to be guilty of
    dubious or manipulative practices…put them in front of a judge, not a politician.

  • http://gmail i41

    a lib, there is nothing to check and monitor, freddie and fannie, of course that is a socialist program by another socialist democrat Freakfaces Dipstick Rusovelt, it pisses money away and with other dems Pres forcing banks to make loans to unqualified borrowers. I know that is to hard for a committed socialist communist democrat to swallow. Hope you are watching the stock market drop, a lib, your muslim Prez, looks like his B–l s–t plans are just working like the socialist communist dems all want! they passed socialized health care, tried a sham finanical over haul, and the governemnt own manufacturing, and you socialist dems the EU plan to be like Hilter did!

    • Dave

      Freddie and Fannie started this whole big mess and that FAG Barney Frank should be strung up by her balls! You are ABSOULUTLY correct…OBAMA IS A MUSLIM, THERE IS NO DOUBT!!!

      • s c

        In a kinda sorta, Redd Foxx defense of Baaney Fwank, it needs to be said that Baaney can’t ‘donate’ that which he never had. George Washington would say England can have him. George Patton would say the military knows how to form and use a firing squad.

  • Al Sieber

    They’re not gonna pass anything that doesn’t benefit them and line their pockets.

  • Michelle

    This bill excludes Freddie & Fanny. It also has exemptions for others that were contributors to the financial disasters we have recently seen. It will not do what is being promised. What it does do is allow the federal government access to all YOUR banking transactions. It would allow the government to seize a business without due process if they “suspect” financial problems exist. More government control of the citizens and small business – more corruption in the government. There are other “hidden” agendas in the bill and we will only find out later as with health care. But once implemented people will only say “when did that happen?” and “how is that legal?”

  • eddie47d

    J.C.; Who’s going to take unscrupulous companies in front of that judge. The government! Surely you don’t expect other companies to go after each other if only one is committing a crime.

    • JC

      The injured party.

  • eddie47d

    Weak regulations helped cause the financial meltdown. New rules would seperate a banks derivatives contracts operations. I assume that means a bank won’t collaspe if these shady deals are done outside of a banks control. Then whoever invests in these derivatives will have to take the loss or gain and not the bank.

    • JC

      Wrong! turning Freddie and Fanny loose with zero restraints and the “Everyone should own a house” socialist policies triggered the meltdown. The Clintons working closely with Obama brought this mess on and they did so deliberately.

      • Dave

        Let’s not forget ACORN’s role in this. They were the people strong arming the banks to make these very risky loans. Barny Frank was the one that made these bad loans federally insured. These people are worse than communists!

  • ONTIME

    Let it be said the majority of congress is a complete waste of the tax payers time, money and effort to make this a country that fuctions with a purpose…..we are going to have to subject these clowns to audits and public exposure individually on a yearly basis in order to keep them in check.

  • WarriorH

    Whew, that was a close vote. Now that this landmark legislation is taken care of let’s get on with some serious business like bailing out the teachers union! We can probably get some of that extra IMF money that’s laying around.

    • Doug

      Also a company has to have 85% of it’s business tied up in what is considered finance and banking. Well GE is at 83% so guess what they are not under this crap of a bill lets guess who got a hand out from the communist of Washington? Lets see you get a hand out you are leveraged to the hilt but will make sure you don’t fall under this new legislation, beauiful!

  • JC

    And now a look at the effect “government reform” has had on our economy. Keep a towel and a bucket handy…

    By Dennis Cauchon, USA TODAY
    http://www.usatoday.com/money/economy/income/2010-05-24-income-shifts-from-private-sector_N.htm

    Paychecks from private business shrank to their smallest share of personal income in U.S. history during the first quarter of this year, a USA TODAY analysis of government data finds.
    At the same time, government-provided benefits — from Social Security, unemployment insurance, food stamps and other programs — rose to a record high during the first three months of 2010.

    Those records reflect a long-term trend accelerated by the recession and the federal stimulus program to counteract the downturn. The result is a major shift in the source of personal income from private wages to government programs.

    The trend is not sustainable, says University of Michigan economist Donald Grimes. Reason: The federal government depends on private wages to generate income taxes to pay for its ever-more-expensive programs. Government-generated income is taxed at lower rates or not at all, he says. “This is really important,” Grimes says.

    The recession has erased 8 million private jobs. Even before the downturn, private wages were eroding because of the substitution of health and pension benefits for taxable salaries.

    The Bureau of Economic Analysis reports that individuals received income from all sources — wages, investments, food stamps, etc. — at a $12.2 trillion annual rate in the first quarter.

    Key shifts in income this year:

    • Private wages. A record-low 41.9% of the nation’s personal income came from private wages and salaries in the first quarter, down from 44.6% when the recession began in December 2007.

    •Government benefits. Individuals got 17.9% of their income from government programs in the first quarter, up from 14.2% when the recession started. Programs for the elderly, the poor and the unemployed all grew in cost and importance. An additional 9.8% of personal income was paid as wages to government employees.

    The shift in income shows that the federal government’s stimulus efforts have been effective, says Paul Van de Water, an economist at the liberal Center on Budget and Policy Priorities.

    “It’s the system working as it should,” Van de Water says. Government is stimulating growth and helping people in need, he says. As the economy recovers, private wages will rebound, he says.

    Economist Veronique de Rugy of the free-market Mercatus Center at George Mason University says the riots in Greece over cutting benefits to close a huge budget deficit are a warning about unsustainable income programs.

    Economist David Henderson of the conservative Hoover Institution says a shift from private wages to government benefits saps the economy of dynamism. “People are paid for being rather than for producing,” he says.

    • Meteorlady

      Great post – but our government does not listen to economist because they know better so we are kind of stuck here unless we get them out in November and start electing business and economic experts to represent us.

  • http://espionageaction-actionadventure.blogger.com Stephen Russell

    U mean Federal Financial takeover, see HC bill as guide for Finances.
    NO change, higher fees etc.
    Unless banks merge?
    But CEOs get parachutes & we the Consumer & shareholder suffer.
    Look again.
    Tea Party Time again

    • jimjimny

      Yea! Tea party time again.

      The Boston Tea Party was about a free ride.

      You boomers have been free-riding to long.

      The Colonists objected to having to pay for the war against the French.

      Yet the Tea tax was a fifty % tax cut.

      It was the direct imposition of taxes theY objected not taxes in principle they quickly set up their own tax system

      • JC

        Do you have any idea at all what you’re talking about?

  • s c

    Watch out, America. Uncle Sham is pointing fingers but refusing to look in the mirror – again. How can legislation that glorifies Obummer’s gang (in total defiance of reality) reform anything?
    Obumer is at it again, re-defining terms and demanding that Americans see his deeds as semi-divine. Historic my aching asterisk. Anyone want to put odds on whether or not Obummer’s puppets read this horse muffin legislation?

    • http://www.helpawhiteguy.com Reggie Brian

      This is a really good question, and in general also. If the politicians haven’t read them, who is actually doing the writing of these monstrosities? Are those people elected?

      Because if we have elected officials who are responsible for what the laws contain, but have relinquished the authority to write them, then what actually are they doing? Their title as a legislator, or “lawmaker”, strongly implies that their primary role is to make laws, yet they are not doing that? Who is?

  • http://gmail i41

    Bills are writen by staffs, with the staff putting in their biases. Most young staffs are from colleges, 2-4 poly scie students, wet behind the ears, spoiled, eleit brats. Usually the students come from some fag arts colleges, they have not a nat’s ass of real time experiences in life, they act just like their bosses, over trained, over educated dinks. Usually every Congress person has their wish list and gets them written in with the a few goodies for their big donors. Wonder why bills are such a mess and takes a truck load of paper.

  • Meteorlady

    We used to have a law – the Glass-Steagall Act – which Bill Clinton signed out of law during his administration. So now we get another law that has a couple of good points but does nothing to solve the real problems.

    As for transparency – where was it – all bill were supposed to be posted 5 days before a vote or did I hear wrong from Mr. Obama? Why where they in such a big hurry about doing this – the damage is done and it’s not going to be undone for a long long time since government interference in private industry seems to be the norm lately. We need over-sight of Fannie, Freddie and and audit of the Federal Reserve to find out where our 2 TRILLION in American dollars went.

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