“The industry has tried to make one last grab at their customers’ pocketbooks,” Dodd said, just before asking for the consent of Republicans to pass the bill unanimously.

No dice. Sen. Thad Cochran (R-Miss.) objected “on behalf of several senators on this side of the aisle.” There’s no word yet which other lawmakers he was referring to.

House Democratic leaders have already passed even stronger legislation that would expedite all the credit card reforms in the previously passed bill — not just the ban on hiking rates for existing balances. Dodd hasn’t signed on to the Senate version of the bill.

It’s worth mentioning that the Democrats — folding to pressure from the banks — were themselves responsible for delaying those reforms, which were initially proposed to go into effect much earlier  this year.

“Giving customers the chance to choose whether they want ‘overdraft protection’ is important,” Senate Banking Committee Chairman Chris Dodd (D-Conn.) said in a statement, “but we need to do far more to protect customers from abusive bank products. We still need to stop the excessive fees, repeated charges, lax notification, and processing manipulation that have become standard in these so-called overdraft ‘protection’ programs.”

Rep. Carolyn Maloney (D-N.Y.) just weighed in with an identical message.

While these rules are a good, solid step forward, they don’t eliminate the need for Congressional action on this issue. The Fed still allows institutions to charge an unlimited quantity of overdraft fees, would do nothing to make fees proportional to the amount of the overdraft, and would not address the manipulation of posting order of charges to accounts. Under the Fed’s new rule, a $5 cup of coffee could still become a $40 cup of coffee after an overdraft fee is added!

Both Dodd and Maloney have introduced legislation that goes a good deal further to protect consumers from overdrafts than the Fed’s new rules. Aside from the opt-in stipulation, those bills would also: (1) cap the number of fees at one per month and six per year; (2) require banks to warn customers at the counter if a purchase would overdraw their account, allowing them to opt out; (3) require that the charge be proportionate to the banks’ cost to process the transaction; and (4) prohibit banks from reordering purchases in order to maximize the number of overdraft fees.

The Fed’s new rules don’t tackle any of those things.

On several key points, though, Dodd breaks sharply from the White House. Most notably, the Senate Banking Committee chairman wants to create yet another agency to police Wall Street, rather than expanding the powers of the Federal Reserve in that role, as Treasury Secretary Tim Geithner has argued is necessary.

The Washington Post examines the significance:

[O]n key points Dodd’s bill breaks with the administration and with the House version of the legislation. The administration favors increasing the Fed’s regulatory powers and preserving the regulatory responsibilities of the Federal Deposit Insurance Corp. Dodd wants to strip both agencies of their powers.

Dodd’s differences with the House and the administration could reduce the chances that Congress can complete work on financial reform by the end of the year, a stated goal of Democratic leaders.

“Dodd,” the Post added, “said he hopes to begin the formal process of approving his bill during the first week of December.”

The House approved legislation today to have its previously passed credit card reforms take effect next month, rather than three months later.

The bill is designed to fix a problem the lawmakers themselves created. Earlier in the year, Democratic leaders bowed to the wishes of the credit card issuers by granting them a long window to implement the reforms. Indeed, most of the changes aren’t scheduled to take hold until late February. Many banks have taken full advantage of the delay, hiking fees and rates — even on existing balances — to pad their profits ahead of the law.

Under the House bill, sponsored by Rep. Carolyn Maloney (D-N.Y.), the reforms will go into effect Dec. 1. The lower chamber passed the bill 331 to 92.

“I believe the card issuers have heard the message loud and clear today: their practices can no longer be tolerated,” Maloney said in a statement following the vote.

But that depends. The Senate would still have to pass the bill in order for it to become law. And at the rate the upper chamber is moving, Dec. 1 doesn’t seem that far away.

“[N]o sooner had it been signed into law, but credit card companies were looking for ways to get around the protections this Congress and the American people demanded,” Dodd said in a statement. “This bill would end those abuses and further protect customers today.”

But Dodd’s bill, by carving out the retroactive rate-hike reform, doesn’t go nearly as far as several separate proposals to expedite all of the credit card reforms passed earlier in the year. The House Financial Services Committee approved that legislation last week, and an identical Senate bill appeared the same day.

Calls and emails to Dodd’s office seeking comment on the larger expedited reform bill were not returned last week. His newly introduced proposal explains why.

Both bills would require banks to get customer consent before enrolling them in the overdraft protection program; both would cap the number of overdraft fees at six per year; both would require banks to notify customers beforehand when a purchase or ATM withdrawal is set to trigger an overdraft fee; and both would prohibit banks from re-ordering transactions for the purpose of maximizing the number of fees.

One significant distinction between the chambers’ bills: the House proposal would also apply to written checks that overdraw an account, not just debit purchases that exceed balances. The Senate bill excludes checks as it applies to the opt-in provision.

There’s a lot at stake here — both for consumers and the banking industry — as overdraft fees have evolved into an enormous money-maker for the banks. This year alone, the banks are expected to reap more than $38 billion in overdraft charges, according to Moebs Services, an Illinois-based financial research firm.

Translation: Don’t expect the industry to take this one sitting down.

So after some Democrats initially delayed the implementation date until next year — a naked bow to the banking industry — others are now trying to change the implementation timeline so the reforms take effect sooner.

Indeed, the House Financial Services today is marking up legislation to do just that. The bill, sponsored by Reps. Carolyn Maloney (D-N.Y.) and Barney Frank (D-Mass.), would expedite the reforms so that they kick in Dec. 1 — 12 weeks earlier, for most provisions, than the existing law.

Boosting the effort, Sen. Mark Udall (D-Colo.) today introduced an identical proposal in the upper chamber.

Outside of the legislative effort, Democrats have been urging the Federal Reserve, which is responsible for implementing the legislation, to expedite the reforms on its own. But Fed Chairman Ben Bernanke told lawmakers this week that, while the quicker start date “could provide benefits for consumers, the [Fed] continues to believe that, given the breadth of the changes required by the [law], card issuers must be afforded sufficient time for implementation to allow for an orderly transition.”

In a letter to Rep. Spencer Bachus (Ala.), senior Republican on the Financial Services Committee, Bernanke also claimed that expediting the reforms unilaterally would steal an opportunity from the public and the card companies to comment on the change.

That response riled Sen. Charles Schumer (D-N.Y.), who said this week that if the Fed doesn’t make the changes, “we should quickly pass legislation in both the House and Senate to do so.”

Stay tuned…

Dodd, who chairs the Senate Banking Committee, argues that consumers are often signed up for the “service” automatically, and rarely have warning at the counter that they’re about to exceed their balance.

“At a time when many can afford it least, American consumers are being hit with hundreds of dollars in penalties for overdrawing on their account by just a few dollars,” Dodd said in a statement. “Banks should not be trying to bolster their profits at the expense of their customers.”

Dodd’s bill would: (1) require banks to get the customer’s consent before enrolling in the overdraft protection program; (2) cap the number of fees at one per month and six per year; (3) require banks to warn customers at the counter if a purchase would overdraw their account, allowing them to opt out; (4) require that the charge be proportionate to the banks’ cost to process the transaction; and (5) prohibit banks from reordering purchases in order to maximize the number of overdraft fees.

Sens. Sherrod Brown (D-Ohio), Charles Schumer (D-N.Y.) and Jack Reed (D-R.I.) have cosponsored the measure. A similar bill, introduced by Rep. Carolyn Maloney (D-N.Y.), has been floating around the House for months.  No word yet, however, if these proposals will be included as part of the Democrats’ plans to move sweeping finance regulations this year.

Kind of fun, isn’t it? We’re the ones that have always been trying to get 60 votes, now they’ll have to get 60 votes to remove.

You know, Harry Reid will, you know, make the final decision on it.

But I know the president is for it. I know Chris Dodd is for it. Max Baucus didn’t speak against it. He just talked about the need to get 60 votes. ‘I can’t do it because I have to get 60 votes.’ Well, if they do it there, he doesn’t have to get 60 votes. So, we’ll get it.

Last week, a group of 30 Democrats sent a letter to Reid (D-Nev.) urging the Senate majority leader to include a public option in the compromise package he’s currently weaving together from elements of the Finance and HELP committee bills. Sen. Tom Harkin (D-Iowa), chairman of the HELP panel, told reporters today that the actual number of Senate Democrats supporting a robust public plan tops 50.

In a statement, the lawmakers cite the reasoning behind the proposal.

Under current law, possession of five grams of crack cocaine (roughly the weight of two sugar cubes) triggers a mandatory minimum five-year prison sentence, while trafficking 500 grams (approximately one pound) of powder cocaine triggers the same sentence. The so-called 100:1 sentencing disparity has been in place since 1986. The Fair Sentencing Act would eliminate the disparity, treating crack and powder cocaine equally.

Sen. Richard Durbin (Ill.), the upper chamber’s second-ranking Democrat, said passage of the bill is long overdue.

The sentencing disparity between crack and powder cocaine has contributed to the imprisonment of African Americans at six times the rate of whites and to the United States’ position as the world’s leader in incarcerations. Congress has talked about addressing this injustice for long enough; it’s time for us to act.

Other sponsors of the bill include Democratic Sens. Patrick Leahy (Vt.), Arlen Specter (Pa.), Chris Dodd (Conn.), John Kerry (Mass.), Al Franken (Minn.), Ted Kaufman (Del.), Russ Feingold (Wis.), Ben Cardin (Md.) and Sheldon Whitehouse (R.I.).

In July, the House Judiciary Committee advanced a similar bill, sponsored by Rep. Robert Scott (D-Va.).