Regulatory reform survived its last significant hurdle Thursday with the Senate moving to block further changes and hold a final vote on the bill.
Lawmakers voted for cloture with the help of three key Republicans, meaning the Wall Street Reform and Consumer Protection Act must now clear a simple majority to pass the Senate.
The procedural vote succeeded by the slimmest of margins: 60 to 38. Democrats relied on the votes of Republicans Olympia Snowe and Susan Collins, both of Maine, and Sen. Scott Brown, R-Mass.
The final vote on the bill is expected later today, and President Obama is expected to sign the legislation next week.
Its completion will culminate more than a year of legislative wrangling on Capitol Hill and represents a major victory for the administration.
The bill embodies the most sweeping overhaul of the financial services sector since the Great Depression. However, it leaves much of the crucial details up to the regulators, who will implement the changes.
"I would be the last person to suggest as the co-author of this bill that we have crafted the perfect piece of legislation," said Senate Banking Committee Chairman Chris Dodd on the Senate floor shortly ahead of the vote. "These are highly complicated areas. One of the reasons we tried not to write a series of regulations far beyond the competency of those of us in this chamber is because it is complicated, and obviously we have delegated the ultimate responsibility that we now have to watch in oversight to the regulatory community to make sure they do this right."
He added, "We believe we have done the best we could."
Earlier this year, the Connecticut Democrat had negotiated for months with the panel’s top Republican, Sen. Richard Shelby, in hopes of brokering a bill with broad bipartisan support. But those talks broke down in the spring, and most Republicans ultimately opposed the legislation.
"I believe we owed more to those that lost their jobs, their homes and their life savings. This bill, I believe, is a missed opportunity," Shelby, an Alabama Republican, said on the Senate floor Thursday.
He added that language in the bill to strengthen consumer protections "may sound like a good idea," but could ultimately backfire.
"The way it is constructed in this bill it will slow economic growth and kill jobs by imposing massive new regulatory burdens on businesses large and small," Shelby said. "It will stifle innovation in consumer financial products. … It will lead to reduced consumer credit at a higher cost."
The bill would create a Financial Stability Oversight Council of federal regulators, led by the Treasury secretary, for the purpose of identifying and knocking down emerging threats in the financial system.
To limit the impact of a systemically significant firm failing, the Federal Deposit Insurance Corp. would be given expanded resolution powers to unwind the company.
The bill would also require most derivatives contracts to be centrally cleared and traded on exchanges and would require banks to push out certain types of swaps such as commodities-based swaps into affiliates.
It would establish an independent consumer financial protection bureau housed within the Federal Reserve Board.
The Fed would be required to regulate interchange fees on debit transactions to ensure they are reasonable and proportional with the cost of processing payments.
Other provisions include the so-called Volcker Rule, which would ban banks from engaging in proprietary trading and limit their investments in hedge funds and private-equity groups.
The bill would require federal regulators to establish mortgage underwriting standards to ensure borrowers can afford to repay their loans and would require lenders to retain 5% of a loan’s risk when packaging mortgages into securities that do not meet such standards.