Senators, K Street Not Sold on Dodd’s Reform Bill
Senate Banking, Housing and Urban Affairs Chairman Chris Dodd (D-Conn.) has worked unsuccessfully for months to reach a bipartisan agreement on the financial regulatory reform package he unveiled Monday. And in trying to please all of his colleagues, the outgoing Democrat seems to have pleased no one.
“I appreciate Chairman Dodd including many of the concepts we have worked on over the past month in the legislation he introduced today,” Sen. Bob Corker (R-Tenn.) said after Dodd released his proposal. “The bill he has introduced has a number of policies I cannot support, but I will continue working through the amendment process in committee and on the floor to hopefully make it a bill that can receive broad bipartisan support.”
Democrats on the panel offered similarly cautious words after Dodd unveiled his sweeping overhaul of the nation’s financial regulatory structure.
Sen. Bob Menendez (D-N.J.) called the bill “a good starting point” and praised Dodd for charging ahead with a committee markup next week. But in a press release, Menendez hinted that certain areas, such as the creation of bailout funds to aid ailing institutions, will need to be improved before the bill will earn his endorsement.
“I am eager to get to the committee work on this bill, and I will judge it on its totality when we are ready for a final vote,” Menendez said.
Dodd, who is capping his five-term Senate career with the sweeping bill before he retires, acknowledged Monday that he still has some selling to do.
“My hope is again that they’ll be supportive of this. It’s not to say every one of them will agree with every aspect,” Dodd said of his Democratic colleagues. “This is a large, complex piece of legislation that’s proposed, but I’ve tried to listen to my colleagues on this.”
[IMGCAP(1)]”One-quarter of the United States Senate sits on the Banking Committee, 22 members, so I’ve got to be sensitive to their concern,” Dodd added.
But it has been Dodd’s collaborative process with Republicans that has irked some Democrats, who believe their chairman gave away too much in the negotiating process to Republicans who ultimately won’t vote for the bill.
Financial services lobbyists predict that neither Corker nor Sen. Judd Gregg (R-N.H.), who sits on the panel, will vote for the measure. Ranking member Richard Shelby (R-Ala.) was decidedly quiet Monday, although he said he would look over Dodd’s proposal with “the serious consideration it deserves.”
“Given the magnitude, complexity, and importance of this task, it is critical that we have sufficient time for a thorough review,” Shelby added in a statement. “This bill is 1,336-pages long. Forcing the Banking Committee to vote on this proposal in a single week is unrealistic and undercuts the potential for bipartisan agreement. Strong reform should not fear scrutiny.”
Liberals are unhappy with Dodd’s proposal to build a consumer protection agency within the Federal Reserve. As Dodd moves to corral Democrats on the Banking panel, several amendments are expected to be introduced, including one that would give the consumer protection agency more autonomy and one that would increase the baseline amount for a proposed rainy day fund to help bail out struggling banks.
As Senators take aim at Dodd’s bill, business and financial services industry groups have already started strategizing how to insert major changes into the bill.
Credit unions are searching for a Democratic Senator who is willing to offer an amendment that would give the consumer protection agency power to regulate banks with assets of more than $50 billion. As it is written, the legislation would give the consumer agency oversight of banks with assets of more than $10 billion, which would include two of the largest credit unions, Navy Federal Credit Union and Pentagon Federal Credit Union.
The legislation also would give the agency oversight of all mortgage-related businesses and large nonfinancial institutions, including insurers. The insurance industry is already pushing back against being a part of the bill.
Dodd hopes to pass a bill out of committee by the end of next week, and he said Monday that just “60 or 70 legislative days” are left on the Senate calendar to get something done this year. Even if he wins the support of committee members, liberals and moderates will want to weigh in on the measure, which could prove a red meat issue for Democrats on the campaign trail this year.
“There is a sense of urgency,” Dodd said. “We’ve spent a lot of time over the last two years. We haven’t exhausted the subject matter … but we do need to act. It’s time to say yes or no.”