WASHINGTON — The House yesterday passed a package of sweeping reforms that will give the federal government greater control over the financial industry from Wall Street to Main Street in a bid to prevent another financial meltdown.
But the measure — a top priority for President Obama — remained a handful of votes shy of approval in the Senate, where leaders had to postpone their vote until after the Fourth of July break.
The House passed the reform, 237 to 192, largely along party lines.
The bill sets up a new consumer-protection bureau and places limits on banks’ activities in derivatives trading — complex securities used to hedge risks — and on their investments in hedge funds.
Senate leaders, meanwhile, are contending with the defection of two Democrats who say the bill isn’t strong enough, as well as the death of Sen. Robert Byrd (D-W.Va.).
To pass the landmark legislation, Senate Democrats are trying to woo a handful of Republicans and they are waiting for Byrd’s replacement, who could be named by early next week.
Senate leaders, who have 56 votes locked up, need 60 votes to overcome Republican filibusters.
Republican Scott Brown of Massachusetts refused to say if he would support the latest version of the bill.
Brown and some of his GOP colleagues backed out of earlier pledges to support the reform bill because they didn’t like a plan to hit banks and hedge funds with $19 billion in fees to pay for the regulatory program.
A last-minute bid to rewrite the bill, dropping the fees in place of raising cash through the Troubled Asset Relief Program and other funding sources, had yet to secure Brown’s vote.
Democrats also agreed to increase premium rates paid by commercial banks to the Federal Deposit Insurance Corp. to insure bank deposits.
Brown issued a statement saying he appreciated the fee change — but said he will “continue to review” the bill over the Fourth of July recess.
Sen. Susan Collins (R-Maine), who also voted for an earlier version, said she was now inclined to support the legislation.
Sen. Olympia Snowe (R-Maine) called her support a “possibility,” putting the Democrats close to passage.
The vast majority of Republicans in Congress still oppose the reform bill.
“This bill sets up a permanent bailout regime that puts the government in charge of picking winners and losers,” said Rep. Randy Neugebauer (R-Texas).