WASHINGTON – Republican senators voted en masse to filibuster the bank reform bill yesterday, dealing a major blow – if a temporary one – to the effort to rein in Wall Street.
The Democrats failed to muster the 60 votes they needed to overcome the filibuster, even though the effort to begin debate on the bill was 57-to-41 in favor, indicating the Democrats have the votes once they overcome the filibuster. All 41 Republicans voted for the filibuster. Democratic leaders vowed to try again, maybe as early as Wednesday, to move the reform bill to a vote.
The filibuster came as the Senate was moving to toughen up the omnibus bill, which now runs more than 1,400 pages, by adding to it a bill passed in committee last week that would regulate financial derivatives and force commercial banks to spin off their lucrative derivatives trading operations.
Wall Street and the nation’s biggest banks, which earn billions of dollars from derivatives trading, have massed with the Republicans to defeat the bill.
Debate on the bill beckons as top officials of Goldman Sachs & Co. are scheduled to testify before the Senate Permanent Subcommittee on Investigation today on allegations the company earned billions of dollars by selling its customers mortgage-backed securities it expected to fail. The Securities and Exchange Commission has filed a civil suit against the investment banking giant, claiming the company intentionally sold short collateralized debt obligations consisting of mortgage securities to its customers.
The Republicans continue to oppose the measure because they oppose a $50 billion fund that would be created from assessments on big banks that would finance the unwinding of failing institutions that pose a systemic risk.
The huge bill has evolved so that it has little direct impact on credit unions, exempting all but the three credit unions with more than $10 billion in assets from examinations by a new consumer financial protection agency.
