By a vote of 223-202, the House passed the Wall Street Reform and Consumer Protection Act of 2009, the biggest financial overhaul since the 1930s.

The bill would give the federal government new powers to regulate and break up financial institutions before they become "too big to fail," increase the SEC's powers of enforcement and create a new Consumer Financial Protection Agency responsible for regulating financial transactions at every level.

Democrats beat back a number of compromise amendments, but the final bill does allow some regulatory exemptions for smaller banks and credit unions, as well as some forms of derivatives transactions.

The administration announced its proposal for a new Consumer Financial Protection Agency, designed to "promote access" and prevent "unscrupulous practices" in the financial industry.

One hallmark of the proposal, according to the administration's announcement, will be regulatory efficiency: "For the first time, a single agency will have authority to examine and enforce compliance against any institution, bank or non-bank, that provides consumer financial products or services." Among the agency's many duties would be enforcement of the newly signed credit card bill.

In a Rose Garden ceremony, Obama signed into law the Credit CARD Act of 2009.

The final version of the bill included not only the measures in the original House version -- outlawing retroactive or unannounced rate increases -- but also tougher measures pushed by Sen. Christopher Dodd, D-Conn., and championed by Obama on the campaign trail, including restrictions on late fees.

Many of these new rules would have gone into effect in 2010, as mandated by the Federal Reserve, but the new bill codifies them into law and contains additional measures, including severe restrictions on the issuance of credit cards to college students.

The House approved the Credit Cardholders' Bill of Rights Act, which was drafted by Rep. Carolyn Maloney, D-N.Y., to protect consumers from crippling credit card debt. This bill, which passed by an overwhelming 357-70 margin, would prohibit retroactive or unannounced rate increases.

The bill now moves to the Senate (subscription), where Banking chairman Christopher Dodd, D-Conn., is pushing for inclusion of further provisions, including restrictions on late fees, that could lead to a showdown with the banking lobby and with ranking member Richard Shelby, R-Ala.

The day before the House vote, Secretary Geithner met with Maloney and with consumer groups, and expressed the administration's support for both the House and Senate bills.

Treasury unveiled its Public-Private Partnership Investment Program, in which the federal government along with private investors would buy up mortgage-backed securities and other bad assets (or, euphemistically, "legacy" assets) on banks' balance sheets in order to revive lending.

Wall Street responded favorably to the announcement, but some observers expressed disappointment -- even "despair" -- that the administration was shying away from outright nationalization of the banks.

Timothy Geithner's first act as Treasury secretary "was issuing new rules that take aim at limiting the influence of lobbyists seeking rescue funds from the department's $700 billion financial rescue program," the Washington Post reports. "The rules, which are modeled on restrictions already in use that limit lobbying on tax matters, would restrict employees' contact with lobbyists in connection with applications for bailout funds or disbursement of those funds. They also require certification to Congress that decisions for using the bailout money are based only on investment criteria and the facts of the case."

President Obama's nominee to head the Securities and Exchange Commission, Mary Schapiro, pledged in testimony [PDF] before the Senate Banking Committee on Jan. 15 that she would "move aggressively to reinvigorate enforcement at the SEC," saying "the American people want and expect us to update the regulatory system that has failed them -- and to prevent the kinds of abuses that have contributed to the economic crisis we now face."