Bringing financial reform a step closer to reality, the United States Senate has voted to approve the Dodd-Frank bill, and it did so with the help of three Republicans, including Scott Brown of Massachusetts.
The legislation, which is expected to be signed by President Obama, will establish the Consumer Finance Protection Bureau as well as the Financial Stability Oversight Council that will monitor the financial system for risky practices that may endanger the economy.
The bill will also tighten controls on the derivatives market, complex financial instruments that were major contributors to the recent crisis.
“All told, this reform puts in place the strongest consumer financial protections in history,” Obama commented after the vote.
However, critics have said that the bill fails to address some fundamental systemic challenges, such as the “too big to fail” problem. Moreover, it does not address Freddie Mac and Fannie Mae, which both benefited with a massive bailout but are still struggling to become solvent.
Republican criticism of the bill also centered on allegations that it will expand government bureaucracy and hand over the control of the economy to politicians in Washington.
In fact, Senate Minority Leader Mitch McConnell (R-Ky.), called it “government-driven solution.”