The U.S. House of Representatives passed sweeping new legislation on Friday to overhaul regulation of the U.S. financial system.

The legislation, which passed by a vote of 223-202, creates the Consumer Financial Protection Agency, a new federal agency solely devoted to protecting investors from unfair and abusive financial products and services. It also founds the Financial Stability Council, which is a group of regulators that will identify systemically important financial firms that must be subject to increased oversight, standards, and regulation.

Additionally, the bill establishes a process for shutting down large, failing financial institutions; promises shareholders an advisory vote on pay practices; proposes a study of the securities industry that will identify needed reforms at the Securities and Exchange Commission; enhances regulation of the over-the-counter derivatives market; outlaws predatory lending; and, requires hedge funds to register.

The House Financial Services Committee says that the legislation will address the various causes of the financial crisis.

“Once signed into law, these tough new regulations will hold Wall Street accountable, end taxpayer-funded bailouts, and protect Americans from unscrupulous big banks and credit card companies,” it says.

The Securities Industry and Financial Markets Association released a statement from president and CEO. Timothy Ryan, Jr., noting that the bill’s passage, “is a significant milestone in reforming regulatory oversight of the financial markets.”

However, the association also reiterated the industry’s concerns with some of its provisions.

“In particular, the bill’s framework for resolving failing non-bank institutions contains too much uncertainty for investors and creditors. Furthermore, the adoption of the so-called Miller-Moore amendment authorizing the FDIC to impose a 10% hair cut on secured creditors will undermine the credit markets and would increase systemic risk,” he said.

“While we may disagree on certain policy details, there is no doubt that the industry shares the same goal of reforming our financial system as president Obama and the Congress. We stand committed to further constructive engagement on these issues as the legislative process moves forward,” he added.

The Financial Services Roundtable also expressed its concerns about the legislation.

“The bill has a number of positive aspects, including creating a federal office of insurance and strengthening systemic regulation of the industry. However, the Roundtable has a number of concerns with the House bill and its ultimate impact on the economy,” said Steve Bartlett, president and CEO for the Roundtable. “The Roundtable remains committed to working with Congress to achieve reform that strikes the appropriate balance between regulation and market innovation.”

SEC chairman Mary Schapiro praised the new legislation. “I applaud the House for taking this historic step to bolster investor protections and fill gaps in our financial regulatory framework,” she said in a statement. “I look forward to continuing to work with Congress on this very significant legislation.”

With files from Megan Harman