House passes bill laying out rules for big banks, financial firms in bankruptcy

Markets Associated Press

Legislation laying out rules for big failing banks that enter bankruptcy proceedings has advanced in Congress as lawmakers still grapple with the aftermath of the financial crisis.

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The House passed the bipartisan legislation on a voice vote Monday. The rewrite of bankruptcy law, which is supported by Wall Street banks, applies to the biggest U.S. banks and other big financial firms like insurance companies. Critics say it favors big banks at the expense of their trading partners and does nothing to prevent another taxpayer bailout of banks in a future crisis.

Prospects for the legislation in the Senate aren't clear. The House vote came in the lame duck session following last month's midterm elections. Control of the Senate will flip from the Democrats to the Republicans in January.