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Econwatch
November 5, 2009 4:04 PM

Senator Dodd Proposes Major Financial Reform

By
Amanda Sterling
Topics
Regulation
(CBS)
Senate Banking Committee Chair Chris Dodd is planning to push a financial reform plan that would restructure the government's control of the banking industry, according to today's .

Dodd, the Democratic senator from Connecticut, has been praised by President Obama for his financial reform efforts, particularly for his work to establish a consumer protection agency.

His new plan, however, would significantly diverge from efforts by the Obama administration and the House Financial Services committee to overhaul the nation's financial regulation system.

The bill Dodd is proposing would almost completely restructure the federal financial regulation system, taking almost all bank-supervising responsibilities away from the Federal Reserve and the Federal Deposit Insurance Corporation (FDIC), the Journal reports. Bank-supervisory responsibilities would fall to a new agency that would oversee all national financial institutions: one single financial regulator. Currently, America has four federal regulatory agencies.

In addition, Dodd's bill would call for the creation of a council - supervised by a White House official - to keep an eye out for potential risks to America's financial system. The plan would also strip the Fed of its power to write consumer-protection measures, and the Journal speculates that it would "throw into question the future of the 12 Federal Reserve Banks."

If the measure sounds extreme, that's because it is. The Washington Post reports that Dodd, lacking in bipartisan support, is pushing forward alone. Sheila Blair, Chairman of the FDIC, has spoken out opposing the bill's ideas; the Journal predicts that it will likely meet resistance from Senate Republicans.

(AP)
In the meantime, the Post reports that Rep. Barney Frank is leading the House Financial Services Committee in creating its own financial regulation reform plan, which is fundamentally different from Dodd's. Frank's bill would eliminate one federal regulatory agency - the Office of Thrift Supervision - and would endow the Fed with greater responsibility in supervising the nation's banks. The House has already approved a new Consumer Financial Protection Agency, which would oversee financial products such as mortgages, credit cards and loans for consumers.

Frank reportedly estimates that the House will be finished voting on his plan by the New Year; and according to the Washington Post, Dodd plans to circulate his bill as early as next week. Washington is in for a long debate before either plan is enacted.

"I think we are going to start out with the presumption of as much consolidated regulation as we can," said Sen. Jack Reed, a senior member of the Senate Banking Committee, told the Journal.

Add a Comment
by bubbadubba November 10, 2009 4:31 PM EST
What we need is less regulation, look at how well it has worked so far!
HA HA HA HA HA HA HEE HEE HEE HA HA HA HA HA.
Reply to this comment
by jaydee102 November 9, 2009 12:50 PM EST
White Duck: one of the Constitutionally-assigned duties of Congress is "to regulate commerce". THEY ARE SUPPOSED TO DO THAT for the protection of the country's health and well-being. As your your stunningly ignorant comment: THE LACK OF REGUALTION, instituted by the GOP starting with Reagan, throwing out the protections that had been written in to law after the Great Depression, is what _caused this_. That's twice in one century - the first time before the GD, the second in the 80's - that Republicans have forced Congress to shirk its oversight of commerce - and nearly destroyed the country as a result. Lucky for them there are people who don't read, don't know history, and don't know the Constitution.
Reply to this comment
by stn_sage November 6, 2009 8:29 AM EST
I find it maddening, frustrating, annoying, and alarming that the main thing that politicians in 'D.C.' seem to come up with...when it comes to applying a solution to banking related problems...is to create GREATER levels of bureaucracy...which instead of definitely assigning tasks and responsibility...do just the opposite! SO...no one knows for sure WHO has responsibility for WHAT!

THEN, they can spend months and years arguing about it until it's settled in the court system! GEESH! ENOUGH, already!

IF this is the best you can do, Mr. Dodd...somebody else needs to step in and try their hand!
Reply to this comment
by White_Duck November 6, 2009 4:45 AM EST
Why, at every turn, does the Gov't think more control or more regulation is the correct answer? So they can get their hands on a bigger slice of the pie, that's why! I don't care if you are Democrat, Republican or whatever, hear us loud: Your sticky little fingers are what has gotten us into this mess! If there weren't soo many Gov't Oversight, then there wouldn't need to be soo many PACs and Special Interest Groups that lure you in to being corrupted! Get yer greedy little paws off the money and serve us like you were elected to do!
Reply to this comment
by stn_sage November 5, 2009 11:24 PM EST
Thank God, for election cycles! If it weren't for them, we wouldn't get any work at all out of the Congress...and especially, the Senate!

Here's Mr. Dodd's latest election cycle...last minute...attempt at trying to portray himself as responsible! HOW? By proposing what should already be in effect, functioning, and maintaining oversight!

Well...buckaroo...it won't work! It's too little, too late!

So, Peter Schiff is going to run against you? If that's true, YOU'RE in trouble!
Reply to this comment
by inesje88 November 5, 2009 10:52 PM EST
Wonder if this has anything to do with Peter Schiff (of Peter Schiff was right you tube fame) challenging Mr. Countrywide for his seat? Hope Peter is victorious. Would be nice to have a person who understands the economy and how to correct it working for the American people. We need to vote our career politicians like Dodd and replace them with people who's only agenda is to serve America and uphold the constitution.
Reply to this comment
by BeckieBest November 5, 2009 6:02 PM EST
Why didn't a Republican propose reforming the banking system after it brought our economy to a near colapse?

Oh that's right, the GOP is just the party of NO.

They just sit around and say NO to every good idea anyone else comes up with.


lol!
Reply to this comment
by ppaulville November 5, 2009 5:50 PM EST
Chris Dodd, here's an idea for "major financial reform": QUIT SPENDING TAX DOLLARS LIKE A DRUNK SAILOR!
Reply to this comment
by nanimac November 5, 2009 5:13 PM EST
The House has not approved the CFPA. The bill hasn't even made it to the floor for debate yet. Please check your facts.
Reply to this comment
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