House and Senate FinReg bills reconciled.

On a party-line vote, the House conferees voted 20-11 to approve the bill; the Senate conferees voted 7-5 to approve.

...
At two minutes before midnight Thursday, some 14 and a half hours after they began work Thursday morning, members of the House-Senate conference committee approved a final revision of the measure known popularly as the Volcker Rule.

The rule, named for Paul Volcker, the former Federal Reserve chairman who proposed the measure earlier this year, restricts the ability of banks whose deposits are federally insured from trading for their own benefit. That measure had been fiercely opposed by banks and large Wall Street firms, who viewed it as a major incursion on some of their most profitable activities.

"One goal of these limits is to reduce participation in high-risk activity that can cause significant losses at institutions which are central to the financial system," Senator Christopher Dodd, the Connecticut Democrat who shepherded the financial bill through the Senate, said. "A second goal is to end the use of low-cost funds " to which insured depositories have access -- to subsidize high-risk activity."

Banks managed to wrangle limited exceptions to the rule that would allow them to continue some investing and trading activity. The agreement limits banks’ investments in hedge funds or private equity funds to no more than 3 percent of a fund’s capital; those investments could also total no more than 3 percent of a bank’s tangible equity.

Many Wall Street firms, including Goldman Sachs, Morgan Stanley and others, have long engaged in significant amounts of trading for their own accounts, a practice that commercial banks and their parent companies were traditionally less inclined to adopt.

 The Wall Street institutions might not have been subject to the new rules except for their decisions during the 2008 financial crisis to convert themselves into bank holding companies in order to gain access to the emergency lending authority of the Federal Reserve.

That was funny when the Masters of The Universe went running to the government for protection.

Regarding Blanche Lincoln's banning of derivative trading by banks, a group of centrist House Democrats held the entire package hostage over loosening the restrictions. Centrist pro-business Melissa Bean of Illinois and several members from New York (i.e. Wall Street) led the good fight . It has always been a source of confusion to me how Wall Street backs Democrats, even though lately they've been tipping towards Republicans.