The US Senate has given final approval to the biggest overhaul of American financial regulation in decades.
The move represents the broadest overhaul of financial rules since the Great Depression and is a major victory for President Barack Obama.
The president proposed the regulatory overhaul last year in response to the 2008 financial crisis sparked by the collapse of the US mortgage market.
By a vote of 60 to 39, the Senate passed a sweeping measure that tightens regulations across the financial industry in an effort to avoid a repeat of the financial crisis.
Mr Obama said Congress's approval today of new regulations on Wall Street will protect and empower consumers even as it helps foster success in the financial industry.
"The American people will never again be asked to foot the bill for Wall Street's mistakes", the president said.
He said the legislation will "lay the foundation for a stronger and safer financial system, one that is innovative, creative, competitive, and far less prone to panic and collapse."
Mr Obama outlined what he said would be benefits to American consumers, saying they would be "empowered with clear and concise information" when making decisions on mortgages, other loans and credit cards so they aren't "duped" into paying hidden fees.
Wall Street had fought bitterly to derail the legislation, which leaves few corners of the financial industry untouched. It establishes new consumer protections, gives regulators greater power to dismantle troubled firms, and limits a range of risky trading activities in a way that would curb bank profits.
"Unless your business model depends on cutting corners or bilking your customers, you have nothing to fear from this reform," president Obama said. He is expected to sign the bill into law next week.
The Senate vote caps more than a year of legislative effort after Mr Obama proposed reforms in June 2009. The House of Representatives approved the legislation last month.
Although president Obama originally had hoped for bipartisan support for reform, only three Republican senators voted in favour of the bill, joining 55 Democrats and two Independents. One Democrat opposed it.
With Republicans poised for big gains in the November congressional elections, Democrats are eager to show voters that they have tamed an industry that dragged the economy into its deepest recession in 70 years.
"I regret I can't give you your job back, restore that foreclosed home, put retirement monies back in your account," said Democratic Senator Christopher Dodd, one of the bill's chief authors. "What I can do is to see to it that we never, ever again go through what this nation has been through."
JPMorgan Chase & Co, the second-largest US bank, said the bill would not compromise its business model but might hurt profitability. "We'll have some effect on revenues and margins and volumes," its chief executive, Mr Jamie Dimon, said on a conference call.
As the largest US derivatives dealer, JPMorgan could have the most to lose from the bill, which aims to curb lucrative trading in risky over-the-counter derivatives and force banks to end trading for their own profits.
The public's understanding of the regulatory revamp is very low, according to an Ipsos online poll released yesterday. Of those polled, 38 per cent had never heard of the reform, while 33 per cent had heard of it but knew nothing about the bill. Other polls show the public divided about its merits.
And even as Democrats hope the regulatory crackdown will help them win support in the November elections, many voters remain angry at government for spending hundreds of billions in taxpayer dollars to prop up Wall Street while Main Street struggled amid a deep recession.
The legislation has also won Democrats few friends on Wall Street as wealthy donors have started to steer more campaign contributions to Republicans.
Under the 2,300-page bill, mortgage brokers, student lenders and other financial firms will have to answer to a new consumer-protection authority, though car dealers will escape scrutiny.
Regulators, who scrambled to contain the damage from failing firms like Lehman Brothers in the last crisis, will have new authority to dismantle troubled firms if they threaten the broader economy.
A council of regulators will monitor big-picture risks to the financial system and many large banks will have to set aside more capital to help them ride out tough times.
Large private-equity and hedge funds will face more scrutiny from federal regulators, and credit-rating agencies could potentially see their entire business model upended.
Much of the $615 trillion over-the-counter derivatives market will be routed through more accountable and transparent channels, and banks will have to spin off the riskiest of their swaps clearing desk operations.
Wall Street deployed an army of lobbyists to fight the bill, but they were undermined by the industry's tone-deaf decision to award fat bonuses to executives only months after the government put up $700 billion in bailout funds.
Republicans argued the bill is an intrusive overreach that fails to address problems in the housing market that spurred the crisis.
"The administration and its Democrat allies in Congress have taken a crisis and used it, rather than solving it," Senate Republican Leader Mitch McConnell said.
House Republican Leader John Boehner said the measure should be repealed.
Even after the legislation is signed into law, financial firms will face years of uncertainty as regulators put the measures into effect. Some analysts believe that will weigh on lending.
According to the US Chamber of Commerce, the bill will spawn 533 new regulations, 60 studies and 94 reports.
The Obama administration will move as quickly as possible to provide clarity and certainty about the new rules, Treasury Secretary Timothy Geithner said. "This is the beginning, not the end, of the process of financial reform," he said.
Groups that pushed for a tougher bill now worry that regulators may be swayed by industry lobbying.
"I will believe reform is here when I see it," said John Taylor, head of the National Community Reinvestment Coalition.
Agencies