Dodd Finance Regs Would Gut the Fed’s Powers
Sen. Chris Dodd (D-Conn.) is set today to unveil legislation overhauling the way the banking industry is regulated. On certain points, the Dodd bill mirrors the wish list outlined by the Obama administration over the summer, including the creation of a new federal agency designed to protect consumers from the increasingly complex world of financial products, from credit cards to mortgage loans.
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.”