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.
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.