Reporting from Washington — Ending more than two weeks of often-contentious negotiations, House and Senate lawmakers reached agreement early Friday on the most far-reaching rewrite of financial rules since the Great Depression.
The final details, including creation of an agency to protect consumers in the financial marketplace and new regulations to reduce risk-taking by large banks and limit their trading of complex derivatives, were hashed out in a marathon 20-hour session that began Thursday morning.
Lawmakers on a joint conference committee labored until dawn reconciling House and Senate versions of the legislation in time for President Obama to brief foreign leaders on the completed deal at a major economic summit in Canada starting Friday.
The House and Senate are expected to approve the bill next week, meeting Obama's July 4 deadline for passage of his top legislative priority heading into November's midterm elections. Lawmakers christened the bill the Dodd-Frank Act after the two main architects, Senate Banking Committee Chairman Christopher J. Dodd (D-Conn.) and House Financial Services Committee Chairman Barney Frank (D-Mass.).
Speaking before leaving for the summit Friday morning, Obama praised the "incredibly hard work" of Dodd, Frank and other key supporters of what he called "the toughest financial reform since the ones we created in the aftermath of the Great Depression."
"Our economic growth and prosperity depend on a strong, robust financial sector, and I will continue to do what I can to foster and support a dynamic private sector," Obama said on the South Lawn of the White House. "But we've all seen what happens when there's inadequate oversight and insufficient transparency on Wall Street."
"The reforms making their way through Congress will hold Wall Street accountable so we can help prevent another financial crisis like the one that we're still recovering from," he said.
The sweeping legislation — about 2,000 pages long — overhauls the regulatory system in an attempt to prevent a repeat of the financial crisis. Among its major initiatives, it would create a Consumer Financial Protection Bureau, impanel a council of regulators to monitor the financial system for major risks, impose tough regulations on complex financial derivatives and grant the government power to seize and dismantle teetering firms whose failure would pose a danger to the economy.
"We've done something that's been badly needed, sorely needed for a long time and we hope will protect our country, create the kinds of jobs and wealth and optimism and trust once again in our financial systems that's been so missing," Dodd said after the final vote shortly before 6 a.m. EDT. "It's a great moment."
Treasury Secretary Timothy F. Geithner said the final bill was strong and "provides crucial momentum for global financial reform."
"As the president travels to Toronto to attend the G-20 Summit, Congress has shown that America is ready to lead by example," he said, urging Congress to quickly pass the legislation.
Asked by reporters if the bill could get through the Senate, where four Republicans were crucial to its passage in May, Obama responded, "You bet."
To pay for the increased oversight of Wall Street and the rest of the industry, lawmakers in their last move on the bill agreed to impose a tax on the largest financial institutions that would raise $19 billion.
"It was the collective errors of the financial industry that led to this set of problems," Frank said. "We think to go to the Goldman Sachses and the JP Morgan Chases and the Blackstones and other large hedge funds and ask them to collectively make a fairly small contribution is reasonable."
The levy would be assessed on financial institutions with more than $50 billion in assets and hedge funds with more than $10 billion in assets.
The conference committee's final vote split along party lines. House members voted 20-11 to approve the revised legislation and senators voted 7-5. Republicans, who sharply criticized the legislation as an unwarranted government intrusion into the private sector, all voted against the final bill, which will be sent to the House and Senate for approval.
House and Senate negotiators made hundreds of changes to the complex legislation since June 10 during a rare public conference committee whose sessions were broadcast live by C-SPAN.
In the final frantic day, lawmakers worked deep into the night as a room full of lobbyists watched the proceedings. Shortly before 4 a.m. Friday there was an unexpected delay when copy machines churning out stacks of amendments ran out of paper.
The thorniest issues were left until the end of the negotiations, among them a decision to exempt most auto dealers from oversight by the new consumer agency.
The sticking point on derivatives was a controversial provision that would force banks to spin off their derivatives businesses as part of new regulations of the complex financial instruments.
