contributions, and many late-night negotiating sessions, the Senate on Thursday took the historic step of revamping U.S. financial laws with the ease of a city council approving a new stoplight.

On a 90-to-8 vote, the Senate sent the Gramm-Leach-Bliley Act to the House, which was expected to approve it late Thursday or early Friday. (For updates, see www.americanbanker.com.)

President Clinton is expected to sign the measure early next week, giving banks, securities firms, and insurance companies the freedom to buy each other without an army of lawyers exploiting regulatory loopholes.

Even before Congress voted, lawmakers were looking to the future.

"This is not the end of the process," said Senate Banking Committee Chairman Phil Gramm. He predicted the new law's provision preventing Wal-Mart and similar companies from offering financial services would prove as anachronistic as the Depression-era Glass-Steagall Act's separation of commercial and investment banking seems today.

"There will be another banking bill within 10 years, and it will deal with commerce," the Texas Republican said. "Banking and commerce are already a reality. This bill is a pause, and it is only a pause, and it is not going to last very long."

Though he supported the legislation, Sen. Paul S. Sarbanes criticized its privacy provisions and predicted Congress would return to the issue.

"I do not believe the right of an individual's financial privacy is adequately protected," the Maryland Democrat said. "The issue of privacy will not go away with the passage of this legislation."

Sen. Sarbanes, Senate Banking's ranking Democrat, also said Congress will eventually have to confront institutions that become "too big to fail." He called on the Federal Reserve Board and the Treasury Department to jointly recommend in the next 18 months how the government should respond when large financial conglomerates run into trouble.

"In trying circumstances, the consequences of failing to deal with this issue could be extremely severe," he said.

Sen. Paul D. Wellstone sounded similar warnings, predicting "a tidal wave of big-money mergers."

The purpose of the bill is "accelerating the trend toward massive consolidation of the financial sector," the Minnesota Democrat said. "This is the wrong kind of modernization. ... It concentrates more and more power in fewer and fewer people."

Americans could be hurt both as consumers and taxpayers, he warned. Concentration of economic power could lead to higher fees, decreased lending in low- and middle-income neighborhoods, and a credit crunch for small business, Sen. Wellstone said.

And government officials would feel too much pressure to rescue the financial conglomerates permitted under the bill -- which he said would not create adequate supervision to match -- when the economy sours. In doing so, Sen. Wellstone said, Congress had ignored the causes of the Great Depression and the recent Asian financial crisis.

"We seem determined to unlearn the lessons from our past mistakes," Sen. Wellstone said. "Today's lust for global gigantism has swept aside the voices of prudence."

Speaking at a conference Thursday morning, Sen. Rod Grams acknowledged that the new law will merely ratify what the market has already accomplished through such regulatory exceptions as Section 20 securities units and unitary thrift holding companies.

"Many times Congress shows up at the dance after the music is over," the Minnesota Republican told attendees of a Schwab Washington Research Group conference.

And in its haste to catch up, Congress may have made some mistakes. Sen. Grams agreed with Sen. Sarbanes that lawmakers are likely to revisit consumer privacy protections. "There might be some problems with what we have done," he said, noting that Senate Banking already plans to review the privacy measures in extensive hearings next year. "There are always unintended consequences."

But most of Thursday was spent celebrating the passage of long-sought legislation.

"We came here today to overturn the most significant financial legislation of the 20th century because it is in the interest of the American consumer," Sen. Gramm said. "This bill is going to make America more competitive on the world market."

"I welcome this day as a day of success and triumph," said Sen. Christopher J. Dodd, D-Conn.

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