The U.S. House of Representatives voted Friday to pass a bill that would increase government regulation of the financial services industry, but it specifically excludes property/casualty insurers.
The Wall Street Reform and Consumer Protection Act of 2009, which the House passed on a 223-202 vote, also would establish a Federal Office of Insurance within the Treasury Department and ease requirements for buyers purchasing surplus lines coverage.
House passage of H.R. 4173 would provide federal regulators with broad authority to identify and respond to systemic risks, including breaking up firms that pose a financial threat to the industry. The plan is designed to hold businesses accountable and end taxpayer-funded bailouts, backers say.
No Republicans supported the House bill, while 27 Democrats voted against the measure that now moves to the Senate.
“House passage of this bill moves us an important step closer to meeting the president’s objectives for reform,” Treasury Secretary Timothy Geithner said in a statement. “Comprehensive reform must establish clear rules of the road with strong enforcement for our nation’s institutions and markets; end loopholes that allowed big Wall Street firms to escape supervision; make it clear that no firm is ‘too big to fail’; and provide strong consumer and investor protections for American families.”
The bill would establish two new agencies: a Federal Insurance Office and a Consumer Financial Protection Agency. While the Consumer Financial Protection Agency would address consumer protection issues with financial products, the legislation specifically excludes the property/casualty insurance industry from its jurisdiction.