WASHINGTON (AP) — President Barack Obama won a second straight legislative victory in his campaign to revamp how America does business, muscling through the Senate the most far-reaching financial reforms since the Great Depression.

The president and his Senate allies beat back strong Republican opposition to the financial measure — one that gets tough on both borrowers and lenders blamed for inflating the U.S. housing bubble that then exploded and plunged the country into it’s worst economic downturn in seven decades.

The Wednesday night victory checks off the second of Obama’s two most important legislative agenda items. Both financial regulatory reform and a massive health care overhaul earlier this year are seen as two of the most consequential new laws in decades.

Obama’s poll numbers show his approval rating with voters, while down from the soaring highs in the early days of his presidency, remain slightly above 50 percent as the nation moves toward congressional elections in November.

That is in sharp contrast to members of Congress, who are held in deep disregard by voters.

The country is in the grip of a raging anti-incumbent mood that could reshape both houses of Congress and put new leaders in state governors’ mansions nationwide.

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Yet, Obama’s continued success with his reform agenda and recent state primary elections call into question Republican claims that they will overturn the Democratic majority in the House of Representatives and significantly diminish their hold on the Senate.

Historically, the party out of power in the first election after a new president takes office has made significant numerical gains in the so-called midterm election, so named because it falls at the midpoint between votes for president.

That fact and voter anger over high unemployment and government spending to save big banks and the auto industry were widely expected to work in favor of Republicans. But Obama’s ability to push through his agenda could solidify his base.

What’s more, the ultra-conservative tea party movement threatens to splinter the Republicans as they reject more moderate candidates who might stand a better chance with the mainstream of the party and the ever-growing block of independent voters.

Whatever the effect on the coming election, the financial regulatory overhaul measure, which still must be melded with a similar measure passed in the House, is likely to be ready for Obama to sign by July 4 — American Independence Day.

The sweeping legislation will prevent home buyers from obtaining a mortgage without producing pay stubs or other evidence that they can make their monthly payments. A new consumer watchdog will police lenders who offer impossible-to-resist subprime mortgages and then jack up the interest rates to impossible-to-pay levels.

The bills also shine more light on complex but hidden financial instruments, the “derivatives” that made long-odds bets on whether Americans could make payments on mortgages they never should have qualified for.

The legislation takes aim at the credit and securities markets that collapsed when those bets turned out to be wrong, prompting Congress and the Federal Reserve to put up more than $2 trillion to prevent a panic that might well have triggered a global depression.

“Our goal is not to punish the banks but to protect the larger economy and the American people from the kind of upheavals that we’ve seen in the past few years,” Obama said earlier Thursday after the Senate cleared a key hurdle blocking final action.

The financial industry, Obama said, had tried to stop the new regulations “with hordes of lobbyists and millions of dollars in ads.”

As House and Senate negotiators meet to work out differences in the bills, the common ground between the two bills will likely tilt toward making the bill tougher on banks rather than weaker. If anything, the political environment has grown more populist since the House passed its bill in December.

Unemployment still hovers around 10 percent and big banks have declared significant, if not record, profits.

Copyright 2010 The Associated Press.