The U.S. Senate passed its version of a financial regulatory overhaul bill last Thursday with a vote of 59 to 39, according to The Wall Street Journal.
The legislation, reportedly the most extensive of its kind since the years following the Great Depression, was supported by 53 Democrats, four Republicans and two independents. Among other things, the bill would:
- Task a new division of the Federal Reserve with protecting customers from abusive business practices in the mortgage industry and the credit card sector.
- Create a new panel responsible for monitoring "systemic risk" and preventing companies from becoming "too big to fail."
- Regulate derivatives trading.
- Prevent taxpayer bailouts of failing companies by enabling the government to "seize and liquidate" them - under certain circumstances and via a specific process.
Those who oppose the bill say it gives the government too much power and will inhibit the "free flow of capital."
The Senate bill will now have to be reconciled with the House version, which passed last December. House Financial Services Committee Chair Barney Frank, D-Mass., will lead negotiations as legislators begin to hammer out their differences and come up with a compromise. The reconciled bill will then be sent to President Obama for his signature.
Small businesses, of course, are waiting to see whether that compromise version of the bill will completely exempt them from Sarbanes-Oxley section 404(b) compliance requirements. Most recently, the Center for Audit Quality lobbied senators against including such an exemption in their version of the bill.