Washington (CNNMoney.com) – The House passed legislation Friday aimed at preventing the next big financial crisis, ushering in the most sweeping set of changes to the banking regulatory system since the New Deal.
The bill, which passed 223-202, imposes more oversight and stronger capital cushions for the largest banks and Wall Street firms. It forces them to pay a total of as much as $150 billion into an emergency fund that could be tapped when a troubled firm needs to be taken over and broken up.
The legislation also calls for the regulation of some derivatives and creates a new Consumer Financial Protection Agency to regulate products such as credit cards and mortgages.
"The bailouts of AIG and Bear Stearns would be not possible - made illegal - under this bill," Rep. Barney Frank, D-Mass., chairman of the House Financial Committee, said Wednesday as debate started on the bill. "If a company fails, it'll be put to death."
The House rejected, by 223-208, an amendment that would have effectively killed the Consumer Financial Protection Agency, replacing it with a council of existing regulators.