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Progress stalls on bank regulation bill

Associated Press / February 6, 2010

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WASHINGTON - Efforts to reach bipartisan agreement on regulations to prevent another financial meltdown have reached an impasse in the Senate Banking Committee, and chairman Chris Dodd said yesterday he will move forward with his version of the bill.

Dodd, a Connecticut Democrat, has been unable to find common ground over the creation of a financial consumer protection agency with Senator Richard Shelby of Alabama, the top Republican on the committee. Nonetheless, Dodd said he will incorporate provisions into the regulatory bill that were worked out by bipartisan teams on the panel.

The breakdown in negotiations is a setback for the bill. It is intended to address weaknesses in the financial system that led to the economic crisis of 2008 and the deep recession. The legislation aims to increase consumer protections on loans and credit cards, add restrictions to previously unregulated financial products, and find ways to dismantle failing firms without resorting to taxpayer bailouts.

“While I still hope that we will ultimately have a consensus package, it is time to move the process forward,’’ Dodd said.

Among the most contentious proposals, and a priority for President Obama, is the creation of a Consumer Financial Protection Agency. The agency would be designed to protect consumers from the kind of questionable lending practices that led to the financial meltdown.