Monday
Mar152010
Time To Act On Financial Reform Is Now, Says Dodd
Monday, March 15, 2010 at 3:55PM
Citing the urgent need to repair the nation’s ailing financial system, Sen. Chris Dodd (D-Conn.) unveiled his own financial regulatory reform plan on Monday.
Dodd, who presides over the powerful Senate Banking Committee, said although a package he had been working on with fellow committee members Richard Shelby (R-Ala.) and Bob Corker (R-Tenn.) was close to being finished, he decided he could no longer wait for them to help put forth legislation.
“Nearly seven million have lost their homes to foreclosure over the last several years. Millions more have lost their retirement funds or their small businesses...Americans are frustrated...and they wonder if anyone is looking out for them...It is certainly time to act.”
In an attempt to prevent future collapses of both the housing and credit markets, Dodd’s plan would do four main things: First, it would abolish the belief that certain banks and financial institutions are “too large to fail,” ensuring that taxpayers would not again be asked to help bail out firms that fall into trouble. Next, it would create a new independent consumer protection agency (CFPA) to serve as a watchdog over various financial products, and would also establish a council tasked with identifying threats to the nation’s economic stability. Finally, it would increase the transparency by which complex financial tools such as hedge funds and derivatives are regulated.
“The legislation I’m offering is comprehensive in its scope because the crisis it aims to solve is comprehensive in its scope,” Dodd said.
While the plan has bipartisan agreement on several of its provisions, Dodd acknowledged that it currently lacks bipartisan support. Additionally, Dodd hesitated to say that the plan would even receive the blessing of every Democrat on the committee.
There are a few reasons for this. First, lawmakers and outside experts are skeptical over whether housing the CFPA inside the Federal Reserve (Fed) is a good idea. Those skeptics argue that the Fed contributed largely to the economic decline, and thus should not be given increased authority. During his press conference however, Dodd insisted that the CFPA would be an independent body, under no command of the Fed.
Another area of concern for some is that smaller-to-medium-sized banks would be needlessly subjected to tightened regulation under the legislation. But Dodd assured that firms with assets valued at under $10 billion would be excluded from increased oversight.
“We must restore confidence and optimism in our economy, accountability in our markets and stability to our middle class,” he said.
The hardest part for Dodd will now, of course, be getting the votes necessary to pass his plan. With the debate over health reform having renewed an atmosphere of partisanship in Washington, Dodd’s legislation will probably be viewed as too politically risky by moderates and conservatives who face re-election this year. Yet on Monday, Dodd -- who has announced he will not be running for another term in office -- viewed the prospects of passage with an almost defiant sense of confidence.
“We will have financial reform adopted this year in the Congress of the United States.”
Dodd, who presides over the powerful Senate Banking Committee, said although a package he had been working on with fellow committee members Richard Shelby (R-Ala.) and Bob Corker (R-Tenn.) was close to being finished, he decided he could no longer wait for them to help put forth legislation.
“Nearly seven million have lost their homes to foreclosure over the last several years. Millions more have lost their retirement funds or their small businesses...Americans are frustrated...and they wonder if anyone is looking out for them...It is certainly time to act.”
In an attempt to prevent future collapses of both the housing and credit markets, Dodd’s plan would do four main things: First, it would abolish the belief that certain banks and financial institutions are “too large to fail,” ensuring that taxpayers would not again be asked to help bail out firms that fall into trouble. Next, it would create a new independent consumer protection agency (CFPA) to serve as a watchdog over various financial products, and would also establish a council tasked with identifying threats to the nation’s economic stability. Finally, it would increase the transparency by which complex financial tools such as hedge funds and derivatives are regulated.
“The legislation I’m offering is comprehensive in its scope because the crisis it aims to solve is comprehensive in its scope,” Dodd said.
While the plan has bipartisan agreement on several of its provisions, Dodd acknowledged that it currently lacks bipartisan support. Additionally, Dodd hesitated to say that the plan would even receive the blessing of every Democrat on the committee.
There are a few reasons for this. First, lawmakers and outside experts are skeptical over whether housing the CFPA inside the Federal Reserve (Fed) is a good idea. Those skeptics argue that the Fed contributed largely to the economic decline, and thus should not be given increased authority. During his press conference however, Dodd insisted that the CFPA would be an independent body, under no command of the Fed.
Another area of concern for some is that smaller-to-medium-sized banks would be needlessly subjected to tightened regulation under the legislation. But Dodd assured that firms with assets valued at under $10 billion would be excluded from increased oversight.
“We must restore confidence and optimism in our economy, accountability in our markets and stability to our middle class,” he said.
The hardest part for Dodd will now, of course, be getting the votes necessary to pass his plan. With the debate over health reform having renewed an atmosphere of partisanship in Washington, Dodd’s legislation will probably be viewed as too politically risky by moderates and conservatives who face re-election this year. Yet on Monday, Dodd -- who has announced he will not be running for another term in office -- viewed the prospects of passage with an almost defiant sense of confidence.
“We will have financial reform adopted this year in the Congress of the United States.”