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The Senate Banking Committee has approved the finance reform bill proposed by the Obama administration, passed by the House and now headed to the full Senate for approval. Unlike the health care bill, which under the special reconciliation process needed only 51 votes to pass, the finance bill needs a full 60 members' votes for passage.

According to the Los Angeles Times, the bill contains the most "sweeping" financial reforms proposed since the Great Depression. Our Great Recession has moved lawmakers to include reforms in the bill such as: an agency to protect consumers in the financial marketplace, a council of regulators to monitor the economy for signs of major risk, allowing the government power to seize and dismantle large firms whose failure would pose a danger to the economy; and imposition of new regulations on hedge funds and complex financial derivatives.

Although no Republicans on the Senate Banking Committee cast their vote in favor of the bill, The Times reports committee chair Sen. Christopher Dodd, D-Conn., drafted the bill with some bi-partisan support. Committee member Senator Richard C. Shelby (R-Ala.) said Republicans would still like to see some major changes in the bill, including a limit on the government's ability to bail out failing firms in the future.

One other key component of the bill is the new Consumer Financial Protection Bureau (CPFB). Once hoped to be completely independent of the Federal Reserve, the consumer protection component of the reform has been shaped into an agency which some fear will be all but toothless in protecting consumers from the abuses of the marketplace or too much under the thumb of the Fed. Senator Dodd still stresses that even as part of the Reserve, the new protection agency would be independent and not report to the Fed's board.

The Times writes Treasury Secretary Timothy F. Geithner is hoping the Senate will continue forward toward the reforms. "Listen less to those whose judgments brought us this crisis. Listen less to those who told us all they were the masters of noble financial innovation and sophisticated risk management," Geithner said in a speech to the conservative American Enterprise Institute.

"Instead, listen to the families and businesses still suffering from this crisis."

Related Resources:

• Senate banking panel OKs sweeping financial overhaul bill (Los Angeles Times)
• New Consumer Protection Agency Could Emerge from Financial Reform (FindLaw's Common Law)
• Financial Reform, Another Brick in the New Foundation (The White House Blog)
• Pelosi: "The Party's Over," New Bank Regs Pass House (FindLaw's Common Law)
• The Proposed Consumer Financial Protection Agency: Enhancing, Not Restricting, Free Markets (FindLaw's Writ)