Bill can’t bank on Senator Brown’s support

Financial regulations overhaul faces hurdle | Legislation seeks to rein in abuses
By Matt Viser
Globe Staff / June 26, 2010

WASHINGTON — Bleary eyed House and Senate negotiators produced an overhaul of financial industry rules early yesterday that would give the government broad powers to regulate Wall Street and protect consumers from unscrupulous lenders, but Democrats enjoyed only a fleeting celebration before Senator Scott Brown, a Massachusetts Republican, said he was withholding support, citing $19 billion in new bank taxes inserted at the last minute.

Brown’s ire over the levy on big banks and hedge funds, which he said would be passed on to consumers, highlighted the difficulties Democrats will face getting the compromise legislation passed in the Senate. Brown and several other Republicans provided crucial support for passage of an earlier Senate bill.

The $19 billion in new taxes would be imposed on large institutions over five years, and the money mostly would be used to pay for costs of increasing regulation over 10 years. It also would pay for $1 billion in federal bridge loans for unemployed homeowners facing foreclosure.

The taxes were tacked onto the legislation during a marathon, 20-hour negotiating session which ended with a final vote at 5:39 a.m. yesterday — just five minutes before dawn.

The legislation cleared a conference committee along party lines, with House conferees voting 20 to 11 and Senate conferees voting 7 to 5. If Democrats can engineer final passage in the House and Senate, President Obama is hoping to sign it into law by July 4.

“I was surprised and extremely disappointed to hear that . . . new assessments and fees were added in the wee hours of the morning by the conference committee,’’ Brown said in a statement yesterday. “I’ve said repeatedly that I cannot support any bill that raises taxes.’’

Brown did not declare outright opposition, however, saying he and his staff were continuing to study the 2,000-page bill. He did win other provisions that he had made conditions of his support, including a key exemption that would apply to MassMutual and provisions allowing banks such as State Street Corp. to invest up to 3 percent of their capital in securities markets. Continue…

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