House Panel OKs Agency To Break Up Major Cos.

Law360, New York (December 2, 2009, 12:47 PM EST) -- The U.S. House of Representatives' Financial Services Committee on Wednesday approved a controversial bill giving federal authorities broad new powers to shrink and dismantle systemically significant companies, advancing a key piece of Democrats' financial regulatory reform package.

The Financial Stability Improvement Act of 2009, introduced by committee chairman Barney Frank, D-Mass., was reported out of committee by a party line vote of 31-27.

The legislation would create a new resolution authority to unwind floundering financial firms outside of bankruptcy court and without taxpayer-funded bailouts.

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