The 1,400-page financial reform bill introduced by Sen. Chris Dodd, D-Conn., the chairman of the Senate Committee on Banking, would have left the Fed with regulatory power over banks with more than $50 billion in assets, which would have cut out the vast majority of banks it oversees, The Washington Post reported.
The Fed had become a popular target for politicians frustrated that the Fed failed to anticipate, let alone prevent, the recession that has led to millions of jobs lost since 2007.
The Fed had argued that supervising just a handful of banks would deprive it of the ability to see the big economic picture.
The amendment that passed "ensures that the nation's monetary policy is connected to Main Street and not just to Wall Street," said Sen. Amy Klobuchar, D-Minn., who introduced the amendment along with Sen. Kay Bailey Hutchison, R-Texas.
"Preserving Fed supervision over smaller institutions means preserving its access to timely information about the flow of credit to small businesses and in communities of all sizes across the country," American Bankers Association President Edward Yingling said in a statement.
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