The Senate passed sweeping financial reform legislation last night, aimed at keeping the financial sector from collapsing as it did in 2008. The final vote was 59-39, with four Republicans joining the majority party to get the bill through. Two Democrats remained opposed to the bill, saying the Senate measure didn’t include tough enough regulations.
 
Republican Senators Olympia Snowe and Susan Collins from Maine, Chuck Grassley from Iowa, and Scott Brown from Massachusetts all voted yes, with Grassley saying that this bill sends a message  to Wall Street.

“There’s no question this bill has flaws,” Grassley said. “Big banks and financial institutions took advantage at the expense of average Americans, and the system let them get away with it.  This bill takes a step in the direction of trying to fix things.” 

The bill, S. 3217, creates a new oversight panel that will monitor financial companies and their dealings with consumers. The most controversial portion of the bill is the derivatives regulation provision, inserted by Sen. Blanche Lincoln, D-Ark. With that provision the bill imposes regulations on bank trading practices—something that hasn’t existed in the past.

At the heart of this bill is an attempt to keep financial institutions from becoming too big to fail and needing the government to step to prevent major economic downfall. In 2008, the government had to intervene to save firms like AIG, Bear Stearns and government sponsored enterprises like Fannie Mae and Freddie Mac.

The bill now has to go through a reconciliation process with the House before it goes to the President’s desk.

President Barack Obama was pleased with the Senate, saying they fought hard against lobbyists who were working hard to keep this bill from going anywhere. He also expressed that this bill is to the benefit of Americans overall, and not an attempt to punish Wall Street.

“Our goal is not to punish the banks, but to protect the larger economy and the American people from the kind of upheavals that we’ve seen in the past few years,” he said. “And today’s action was a major step forward in achieving that goal.”