WASHINGTON — The Senate on Thursday night passed the most sweeping changes in government regulation of the nation's financial institutions since the Great Depression, including strong new consumer and investor protections and provisions that seek to shine a bright light on the dark corners of Wall Street.
In a 59-39 vote, four Republicans joined 53 Democrats and two independents in approving the Restoring American Financial Stability Act of 2010. Two Democrats, Washington's Maria Cantwell and Wisconsin's Russ Feingold, as well as 37 Republicans voted no.
Republican Sens. Olympia Snowe and Susan Collins of Maine, as well as Scott Brown of Massachusetts and Charles Grassley of Iowa, voted yes; Democrats Robert Byrd of West Virginia and Arlen Specter of Pennsylvania, who lost in Tuesday's primary, didn't vote.
The House of Representatives passed a similar version, the Wall Street Reform and Consumer Protection Act of 2009, six months ago. The two bills must now be reconciled in negotiations between the two chambers, passed anew by each and sent to President Obama for his signature, which is expected by July 4.
"Our goal is not to punish the banks, but to protect the larger economy and the American people," Obama said Thursday.
Final passage came after an unusually smooth Senate debate, marred only slightly by Wednesday's failure to limit debate. That proved to be only a small bump in the bill's path, as Brown switched his vote Thursday to give Democrats the 60 votes they needed to limit debate and move to final passage.
Brown said he changed his mind after talking with Senate Majority Leader Harry Reid, D-Nev., and getting assurances on his concerns that insurers and other non-bank companies won't be subjected to tough restrictions on their ability to trade stocks on behalf of themselves and clients.
Like its House counterpart, the Senate bill would empower the Federal Reserve as the chief policeman on guard against risks to the broad financial system.
It also would create a new independent entity — called the Bureau of Consumer Financial Protection — to write rules for consumer credit products such as mortgages, student loans and credit cards, aimed at preventing predatory lending and creative loans of the sort that got so many homeowners in trouble.
The Senate bill also would create a mechanism for government to dissolve huge globally interconnected banks, those now dubbed "too big to fail" because their size threatens havoc in financial markets should they fail.