Fresh off its July 4th recess, the Senate passed Thursday, July 15, the massive 2,300-page financial services reform bill; the bill now goes to President Obama for his signature, which is expected in the coming days. The Senate passed the bill by a 60-39 vote.
Before cloture was invoked by a 60-38 vote to stop debate on the bill on the morning of July 15, Senator Richard Shelby (R-Alabama), ranking minority member on the Senate Banking Committee, urged his fellow Republicans to “reject” what he called the “2,300 page monster.”
In his remarks on the Senate floor following Shelby’s remarks, Senate Banking Committee Chairman Christopher Dodd (D-Connecticut) conceded that while the bill “was not perfect,” Congress did “the best it could” in crafting a bill that was designed to mitigate disastrous results from the inevitability of another financial crisis.
Dodd went on to say that passage of the bill is not the end as “oversight and consultation will be required over the years to make this [bill] work well.”
After cloture was successfully invoked on the bill (Senator Michael Crapo (R-Idaho) and the late Senator Robert Byrd did not cast a vote on the bill), Senator Ted Kaufman (D-Delaware) said on the Senate floor that with this bill “regulators are being handed an enormous responsibility,” and that it would be up to Congress to ensure that regulators were given the resources they need to fulfill those responsibilities.
The House and Senate missed their deadline to send the Wall Street Reform bill to President Obama for his signature by July 4. The House sailed through a final vote on the bill’s passage late Wednesday, June 30. The Senate, however, delayed taking up a final vote until it returned from recess on July 12.
Senate Democrats needed at least four Republicans to vote for the bill because the death of Senator Robert Byrd (D-West Virginia) in the early morning hours of June 28 left them with only 56 of the 60 votes needed to pass the bill. West Virginia’s Democratic governor, Joe Manchin, has indicated that he’s interested in running for the U.S. Senate if a special election is held in November.
Senator Maria Cantwell (D-Washington) switched to a “yes” vote on July 1; Democrats only needed to secure the support of two Republicans to vote in favor of the bill in order to avoid procedural hurdles in the Senate. Senator Scott Brown (R-Massachusetts) decided to support the bill, as did Maine Republicans Susan Collins and Olympia Snowe. Russ Feingold (D-Wisconsin) cast a “no” vote as did Senator Chuck Grassley (R-Iowa).
Securities and Exchange Commission Chairman Mary Schapiro said just a few days before Congress returned from its July 4th recess that while the agency is committed to finalizing the many rules it has proposed over the last 18 months, she anticipates spending the next 18 months implementing the changes laid out in the reform bill, formally called the Dodd-Frank Wall Street Reform and Consumer Protection Act.
She cited specifically oversight of the over-the-counter derivatives market, and conducting a study of broker/dealer and investment advisor obligations along with imposing a fiduciary standard on brokers.
“The bill calls on the SEC to study the effectiveness of existing standards of care for broker/dealers and investment advisers. We would be seeking public input and identifying legal and regulatory gaps, shortcomings or overlaps in these standards,” Schapiro said in a July 9 speech before the Society of Corporate Secretaries and Governance Professionals.
“The legislation also gives the SEC authority to promulgate rules that would impose a harmonized fiduciary standard on broker/dealers and investment advisers who provide personalized investment advice to retail or other customers,” she added. “I have long advocated such a uniform fiduciary standard and I am pleased the legislation would provide us with the rulemaking authority necessary to implement it.”
Democratic negotiators on the bill had to briefly reopen the conference negotiations on June 29 after Senator Scott Brown (R-Massachusetts) said he would vote against the Wall Street reform bill unless a $19 billion tax on big banks that was inserted during the conference committee debate was deleted.