GOP's Gregg sees progress on financial regulation

WASHINGTON Fri Feb 12, 2010 3:52pm EST

Senator Judd Gregg (R-NH) speaks during an interview with Reuters on Capitol Hill in Washington March 30, 2009. REUTERS/Kevin Lamarque

Senator Judd Gregg (R-NH) speaks during an interview with Reuters on Capitol Hill in Washington March 30, 2009.

Credit: Reuters/Kevin Lamarque

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WASHINGTON (Reuters) - Republicans and Democrats in the Senate share common ground on financial regulation, but the White House's stance on how to protect consumers from banking abuses remains an obstacle to legislation, a top Republican senator said on Friday.

Sen. Judd Gregg of New Hampshire, ranking Republican on the Senate Budget Committee, said in a television interview that the need for financial regulation was so widely recognized in Congress that he believes lawmakers will produce a bipartisan measure.

"There's a lot of common ground here. This really isn't a partisan issue," Gregg told CNBC. "This is an extremely complex exercise in getting governance right and the only really big philosophical difference here is how you protect consumers."

"These negotiations are going forward," he added. "My guess is that at the end of the day the Senate will have a fairly substantive, basically bipartisan product. But how we get there is not absolutely clear."

President Barack Obama has made financial regulation a top priority for 2010, as have governments in the European Union, which are also hammering out new rules meant to prevent a recurrence of the recent global financial crisis.

Judd spoke a day after the leading Democrat on financial regulation -- Senate Banking Committee Chairman Christopher Dodd -- said he was discussing legislation with Senator Bob Corker, a first-term Republican member of the panel.

Just six days earlier, Dodd had said he hit an impasse with Senator Richard Shelby, the committee's top Republican, in talks that have dragged on for more than a year over tightening oversight of banks and capital markets.

The Dodd-Shelby talks were torpedoed by one of Obama's key proposals -- creating an independent Consumer Financial Protection Agency to regulate mortgages and credit cards.

ANGRY RHETORIC FROM WASHINGTON

A leading Wall Street money manager warned on Friday that uncertainly combined with angry Washington rhetoric toward Wall Street could jeopardize the U.S. economic recovery by causing banks to cut back on the lending to small and mid-size businesses.

"We are debating this hugely important issue in an inflammatory political atmosphere in which key participants seem determined to single out the banks for special retribution," Stephen Schwarzman, who heads the Blackstone Group, wrote in a Washington Post op-ed piece.

Gregg said he believes Dodd and Shelby had an agreement on consumer protection before talks broke off. "If the White House hadn't sort of pulled back the Democratic membership on that issue, we could all go forward in a bipartisan way," he said.

Republicans want consumer protection melded with efforts to maintain the soundness of the financial system, fearing that a free-standing consumer agency would be a powerful vehicle for interests hostile to Wall Street.

In a statement late on Thursday, Corker called creation of the consumer protection agency the debate's hot-button issue and said he and Dodd agreed to set that topic aside "for now."

But Gregg said he opposed any negotiating approach that would separate consumer protection from needs to curb reckless banking practices.

"That's going to be politically an untenable position," he told CNBC. "Our ability to get the consumer protection right means that it really needs to be merged into the entire process of negotiating the regulatory reform. I don't think you can separate the two."

The New Hampshire Republican also said talks between him and Democratic Sen. Jack Reed of Rhode Island, a banking committee member, have already made "very strong progress" on the issue of derivatives.

(Additional reporting by Kevin Drawbaugh, editing by Philip Barbara)

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Comments (11)
vintel7 wrote:
This guy Gregg is a bozo who has done nothing but obstruct all efforts to fix the deep crises this country is in. This clown should not be commenting on financial regulation or consumer protection…this bozo and all the other criminal republicans need to be rounded up and thrown in jail.

Feb 12, 2010 9:28am EST  --  Report as abuse
IdiotSavant wrote:
Saying that the means of protecting the consumer is the only barrier to passing financial reform (or any needed reform for that matter) is simply more of the same old rhetoric. If republicans are truly willing to protect the consumer and overcome that barrier then they would propose a better solution to protecting consumers than what the democrats have proposed.
It seems to me that the reason they cannot overcome this (fictional) barrier is that they do not want to pass meaningful legislation that will prevent the finanial crisis we have faced.
This is all the more reason to remove the real barrier Americans face: the two party system of government that creates only more the the same old unbearable break down of our political and legislative process.
I say we give America and Americans a three party system that can provide the voice of reason that can overcome the impasse of a faulty two party system!

Feb 12, 2010 10:47am EST  --  Report as abuse
loguealator wrote:
Ideologues couldn’t be more wrong about Obama being socialist, or destroying capitalism. In fact, Obama is guilty of perpetuating W’s policies bailing out Wall Street, and continuing the bi-partisan “happy conspiracy” of inadequate financial regulation, thereby giving Wall Street a license to steal. Consider Obama’s closest economic advisors, Geithner and Summers, Wall Street sycophants the both of them. Only recently has Obama become more critical, and finally begun listening to reason from Paul Volker, vanquisher of inflation, and one of the most respected central bankers of all time.
Wise voters are looking for a Teddy Roosevelt “Square Deal”, not the Faustian bargain with Wall Street, Democrats from financial corridor states struck like Dodd, Schumer, Lieberman, Kerry, Biden, and Frank. So far the wise have been bitterly disappointed by obstruction of even meek democratic reforms by Republicans like Shelby, Gregg, or Corker, who are oblivious to their own state’s interests, and the national good. Certainly the Fed deserves blame, but no one drove Wall Street’s masters of the lemming universe off the financial cliff; it was entirely self inflicted. The turn we need is not right or left, but towards accountability; we need no more Wall Street spin, or republican myth making, about supply-side, trickle down economics, which was no more than a massive expansion of private, as well as public, debt.

Feb 12, 2010 11:28am EST  --  Report as abuse
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