On Monday, Republicans, united in opposition to what some call the most sweeping overhaul of the United States financial regulatory system since the Great Depression, thwarted an effort to end debate on the matter voting 57 to 41 against cloture, thus falling short of the 60 votes needed to cut off a threatened filibuster of the Democrats’ motion to proceed. So, at least for the moment, the bill has been blocked from reaching the Senate floor for debate.
However, Democratic leaders of the Senate intend to keep the bill on the floor to increase the pressure on Republicans to move forward, as the Republican led filibuster will delay other pressing matters on the Senate’s agenda. What is more, this is an issue for which there is much public pressure to act, leaving politicians who block reform open to voter backlash at the polls in November.
Even though politics are surely at play in this election year battle, the opposition has some legitimate concerns. For example, the danger that enacting a regulatory regime that over reaches could having a chilling effect on financial markets.
The bill favored by Democrats would impact every aspect of the financial system:
- authorizing the government to shut down institutions deemed to pose a threat to the overall system,
- establishing the Bureau of Consumer Financial Protection as a consumer protection agency focused on ending predatory lending,
- requiring that consumers receive detailed information on mortgages, credit cards and other financing,
- providing oversight of hedge funds,
- imposing stringent rules on derivatives trading,
- restructuring the federal system of bank regulation, and
- providing shareholders more power in the election of directors and an advisory role with respect to executive pay