|Senator Chris Dodd is under pressure to take stronger measures to cut down bank sizes and limit their activities.|
Dodd revamps financial overhaul
WASHINGTON — The senator trying to rewrite the nation’s financial industry rules is dropping plans to create a stand-alone consumer financial protection agency and to give a single regulator the power to oversee all banks, according to people familiar with the evolving proposal.
Backing away from the proposal he offered four months ago, Senator Chris Dodd of Connecticut, the chairman of the Senate Banking Committee, said the bill he intends to unveil today is an attempt at consensus that incorporates Democratic and GOP ideas, even though no Republicans have lent their support.
“There has been some evolution,’’ Dodd said yesterday. But he voiced irritation with Republicans in his committee who demanded Friday that he delay committee action on the bill.
“Tell that to someone who just lost their job, their retirement, their health care, and their home that we’re moving too quickly,’’ he said.
In the coming weeks, Dodd’s skills will be tested as much as they ever have in his five terms in the Senate as he shepherds the bill through his committee and onto the Senate floor. The legislation, a priority for President Obama, aims to avoid a repeat of the financial crisis that caused the Wall Street meltdown 18 months ago.
Dodd, who’s not seeking reelection this fall, is planting himself squarely between a united bloc of Republicans on his committee and Democrats who have insisted on a strong, autonomous consumer agency. He’s also facing Democratic pressure from outside his committee to take stronger measures to cut down the size of banks and to limit their activities.
“Members have to make up their minds,’’ Dodd said. “While they may not like everything here, I’m not going to give them much room to say we shouldn’t do anything.’’
Dodd would not discuss specifics of his plan, but acknowledged that his views on a single regulator had changed and that he also saw merit in not giving a consumer agency complete autonomy in writing regulations.
“There ought to be a means by which there is some reconciliation of potential conflict’’ between consumer protections and regulations regarding the safety and soundness of banks, he said.
Those familiar with the plan described it on the condition of anonymity because they were not authorized to speak publicly.
Dodd wants to create a special council that would watch over the financial markets, looking for trouble spots that could threaten the economy. The council would have an independent chairman appointed by the president. Members would include the treasury secretary, the chairman of the Federal Reserve, and the heads of several regulatory agencies.
The Fed, which would have lost all its regulatory powers under Dodd’s initial plan, would emerge with fewer banks to supervise, but with new muscle over the biggest banking and nonbanking financial institutions.
The central bank would oversee all bank holding companies with assets of more than $50 billion.