WASHINGTON — Congress on Thursday gave final approval to an overhaul of the nation’s financial regulatory system, intended to address the causes of the 2008 economic crisis and rewrite the rules for a more complex — and mistrustful — era on Wall Street.
The vote by the Senate was 60 to 39, with three Republicans from the Northeast joining with the Democrats in voting to advance the legislation.
One Democrat, Senator Russ Feingold of Wisconsin, voted against the bill, saying it was still not strong enough to prevent future crises. And the seat held by Senator Robert C. Byrd, Democrat of West Virginia, who died last month, is vacant.
"We want to make sure this disaster never happens again," the Senate majority leader, Harry Reid of Nevada, said after the vote. "The solution has to start here."
Mr. Reid added, "No more bailouts. No bank is too big to fail."
The House approved the bill in June by a vote of 237 to 192, and there, too, only three Republicans voted in favor.
The legislation now heads to President Obama for his signature, and the White House said it was already planning a ceremony next week to mark the completion of another landmark piece of legislation, following the enactment of the historic health care bill in March and last year’s economic stimulus program.
Mr. Obama’s press secretary, Robert Gibbs, said that the regulatory overhaul was an achievement that Democrats would promote throughout the fall election season. “We cannot continue to operate using the same rules that got us into this recession,” Mr. Gibbs said. “I think this will be a vote Democrats will talk about through November.”
But like those other big laws that Mr. Obama can claim as victories, the passage of a new regulatory regime hardly guarantees that it will be effective. And, despite lingering public anger at Wall Street, the political implications for the midterm elections are highly uncertain. Most Republicans voted resoundingly, and confidently, against the bill.
Even Senator Christopher J. Dodd, Democrat of Connecticut and chairman of the banking committee who was a main author of the bill, acknowledged that Americans will probably not know for years — perhaps not until the next financial crisis strikes — if the response by Congress this year was sufficient, or falls short despite the best intentions.
“We won’t know the full results of what we have done until the very institutions we have created, the regulations we have suggested and provided for are actually tested,” Mr. Dodd said in a floor speech. “We can’t legislate wisdom or passion. We can’t legislate competency. All we can do is create the structures and hope that good people will be appointed who will attract other good people — people who will make careers and listen and see to it that never again do we go through what we have gone through.”
Passage of the bill would herald the end of more than a generation in which the prevailing posture of Washington toward the financial industry was largely one of hands-off admiration, evidenced by steady deregulation. While the measure does not fully restore the toughest restrictions imposed after the Great Depression, it is a clear turning point, highlighting a new distrust of Wall Street, fear of the increasing complexity of technology-driven markets, and renewed reliance on government to protect the little guy.
The bill would create a council of high-level federal officials, led by the Treasury secretary, to try to detect, and perhaps prevent, systemic dangers to the financial system, and it would give the government new authority to seize and shut down failing financial institutions, by liquidating assets and forcing shareholders and creditors to take losses.
It would create a powerful consumer financial protection bureau, to be housed in the Federal Reserve, and widely expand the regulatory authority of the central bank. It would widen the purview of the Securities and Exchange Commission to strengthen regulation of hedge funds, other private equity firms, and credit rating agencies.
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