House Strikes at Wall Street --- Bill Would Usher in Biggest Change to Finance Regulation Since '30s; Curbs on Fed
WASHINGTON -- The House of Representatives, in a display of anti-Wall Street sentiment, passed sweeping legislation Friday that rewrites the rules governing financial markets, aiming to restrict the operations of big banks and the powers of the Federal Reserve.</br></br>The legislation, if enacted, would bring the biggest change to financial rules since the 1930s, changing business practices for everyone from mortgage brokers in California to traders on Wall Street. The vote advances a major White House initiative designed to tackle the perceived causes of last year's financial crisis.</br></br>The House's action isn't the final word. The Senate has yet to act, and an early version of its bill is different from the House version in many respects. But senators hope to have an agreement in principle by the end of December and to pass a bill in the first half of 2010.</br></br>Under the House version, large financial companies including Goldman Sachs Group Inc. and J.P. Morgan Chase & Co. would be hit with billions of dollars in fees and would see new restrictions on their operations.</br></br>The bill would strip nearly all of the Federal Reserve's powers to write consumer-protection laws and would allow -- for the first time -- an arm of Congress to audit the Fed's monetary policy decisions, supposedly a politics-free zone. The Fed has fiercely resisted the idea.