Sen. Cantwell now supports Wall St. overhaul

  • Fri Jul 2nd, 2010 9:51pm
  • News

By Rachel La Corte Associated Press

OLYMPIA — Sen. Maria Cantwell’s decision to back an overhaul of financial regulations was secured after the bill’s enforcement powers over derivatives trading was strengthened, a spokesman for the Democrat said Friday.

Cantwell announced Thursday that she would vote for the bill when the Senate takes action after the weeklong July 4 congressional break.

The junior senator from Washington state was one of two Democrats who had opposed a Senate version of the sweeping bill in May.

Spokesman John Diamond said Cantwell’s main focus has been on toughening controls on the complex securities known as derivatives.

“Abuses in derivatives trading, which have not been regulated, were one of the chief underlying causes of the entire blowup of 2008,” he said.

The changes to the bill that were made in a conference committee last week included provisions that she not only supported, but had authored, he said.

“That got our vote,” Diamond said.

Cantwell also received a letter from Commodity Futures Trading Commission Chairman Gary Gensler on Thursday that assured her that the changes reduce risk and enhance transparency. Gensler wrote that the bill that came out of the conference committee was “strong, comprehensive and historic.”

The legislation seeks an overhaul of financial regulations unseen since the 1930s. It would set up a mechanism to watch out for risks in the financial system, make it easier to liquidate large failing firms and write new rules for complex securities blamed for helping precipitate the 2008 economic crisis. It also would create a new consumer protection agency.

A blended version of House and Senate bills passed the House on Wednesday. The vote in the Senate is not yet firm, though. The death of Sen. Robert Byrd and vacillation by three Republicans who had previously supported the bill leaves the measure shy of the 60 votes needed to overcome procedural hurdles.