* Obama knocks Wall Street excesses, abusive practices
* Obama pledges no more U.S.-funded bailout
* Business groups say law creates uncertainty
(Updates with more details throughout)
By Ross Colvin
WASHINGTON, July 21 President Barack Obama
signed into law on Wednesday the most comprehensive financial
regulatory overhaul since the Great Depression, vowing to stop
risky behavior on Wall Street that imperiled the U.S. economy.
Influential business groups lined up to criticize the new
law, underscoring Obama's uneasy relationship with America's
business community. Some on Wall Street, however, welcomed the
clarity offered by the law after months of wrangling in
Congress over what should be in the legislation.
The law, which got final approval from the Senate last
week, targets the kind of Wall Street risk-taking that helped
trigger a global financial meltdown in 2007-2009 and also aims
to strengthen consumer protections.
Obama, facing voter unrest over Wall Street bailouts that
have failed to spark a strong Main Street job recovery, pledged
taxpayers would never again have to pump billions of dollars
into failing firms to protect the economy.
"Because of this law, the American people will never again
be asked to foot the bill for Wall Street's mistakes," Obama
said at a signing ceremony attended by some Wall Street
bankers, business leaders and lawmakers.
"There will be no more taxpayer-funded bailouts. Period."
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With Republicans poised to make gains in the November
congressional elections, Obama's Democrats are eager to show
voters that they have taken steps to tame an industry that
dragged the economy into its deepest recession in 70 years.
Obama and Democrats have yet to gain political traction
from the legislative victory, with Americans still anxious
about a 9.5 percent jobless rate and ballooning deficits.
The financial regulatory reforms were a major achievement
for Obama and his ambitious domestic agenda. Earlier this year
he signed into law sweeping reforms of the United States' $2.5
trillion healthcare system.
The financial reforms won Democrats few friends on Wall
Street. Wealthy donors have started to steer more campaign
contributions to Republicans, who voted overwhelmingly against
Obama had harsh words for "unscrupulous" lenders and others
he said had taken risks that endangered the economy. He said
the new law was aimed at curbing abuses and excesses on Wall
Street and stopping taxpayer bailouts of failing companies.
The law would provide certainty "to everybody from bankers
to farmers to business owners. And unless your business model
depends on cutting corners or bilking your customers, you have
nothing to fear from this reform," Obama said.
The U.S. Chamber of Commerce, an influential business group
that often criticizes Obama's economic policies, said it would
have the opposite effect.
"Such a broad, sweeping bill epitomizes a law with
unintended consequences that creates more uncertainty for
American businesses," said Thomas J. Donohue, president and CEO
of the Chamber.
The American Bankers Association expressed disappointment
with the legislation, saying it "contains a tsunami of new
rules and restrictions for traditional banks that had nothing
to do with causing the financial crisis in the first place."
Much of its impact will depend on how it is put into
practice. Bart Chilton, a commissioner with the U.S. Commodity
Futures Trading Commission, said the law boosts transparency
and gives regulators better tools to regulate markets, but many
questions remained to be answered.
"This is a wide-ranging bill with many facets, hundreds
where regulators still need to put some more meat on the bones.
How we do that, and when we do that, are questions that will
really tell if this legislation meets the expectations of its
supporters," he said.
Ruth Porat, chief financial officer of financial giant
Morgan Stanley (MS.N), which on Wednesday reported
higher-than-expected second quarter profits, said the company
was pleased to see the bill signed as it put "some clarity
around the issues."
The legislation targets potentially lucrative trading in
risky over-the-counter derivatives and aims to force banks to
end trading for their own profits.
It creates a Bureau of Consumer Financial Protection to
regulate products ranging from credit cards to mortgages. The
administration considered this one of the most critical parts
of the bill but banks fought it bitterly.
Obama received repeated ovations during his speech and one
round of applause was reserved for his praise of three
Republican lawmakers who broke ranks with their party to vote
for the legislation.
The White House said Citigroup Inc's (C.N) CEO Vikram
Pandit; Bob Diamond, president of Barclays Plc (BARC.L); and
Gerald Hassell, president of Bank of New York Mellon, attended
JPMorgan Chase & Co (JPM.N) Chief Executive Jamie Dimon was
one of the few major bank heads not invited, a spokeswoman for
the second-largest U.S. bank said.
Dimon once enjoyed a close relationship with Obama, but he
later emerged as a vocal critic of the efforts to reform the
U.S. banking industry.
The White House dismissed as a "fake controversy" media
reports on the failure to invite business leaders like Dimon.
"The CEOs who opposed reform never expected to be invited
to the bill signing and not a single one has complained to the
Administration," White House spokesman Jen Psaki said.
(Additional reporting by Matt Spetalnick, Christopher Doering,
Maria Aspan, Elinor Comlay, Joe Rauch, Steve Eder, Dan
Wilchins, Patricia Zengerle and Steve Holland; Editing by David