Dodd: hopes for financial reform deal within days

Fri Mar 5, 2010 9:57am EST

* Dodd says bipartisan talks on consumer watchdog ongoing

* Says sees Senate action on jobs bill early next week

* Would prefer reconciliation not needed for healthcare

WASHINGTON, March 5 (Reuters) - Senator Christopher Dodd, chief negotiator for the Democrats in talks on a bipartisan financial reform bill in the U.S. Senate, on Friday said lawmakers are "not there yet" on reaching an agreement but said he hopes one will be reached within days.

Debate over the level of independence of a consumer financial product watchdog is holding up other needed reforms, Dodd said in an interview with CNBC Television.

He speculated that it has become a sticking point because the public can relate to 32 percent credit card interest rates and big prepayment penalties on mortgages.

"The subject matter of derivatives and swaps, and the issues of systemic risk and 'too big to fail' seem somewhat removed from the general public," Dodd said.

Regarding the $15 billion jobs bill that the House of Representatives passed on Thursday, Dodd said the Senate will "respond favorably" to the package of tax credits and highway construction.

He sees Senate action early next week on the bill. If the Senate passes it, it will then go on to President Barack Obama to sign it into law.

Dodd also spoke about the Obama administration's willingness to force healthcare reform through Congress by using reconciliation.

That process allows legislation to pass through a simple majority vote in the 100-member Senate rather than the 60 votes needed to clear Republican procedural hurdles.

"I would prefer we didn't go reconciliation," Dodd said.

But he also said the importance of the issue trumps the controversy of the process used to get it passed.


He said he is more hopeful that bipartisan work on financial reform will be successful.

"We're getting there, but we're not there yet, but I feel very optimistic we will," Dodd said.

Obama's proposal last year to create a stand-alone, independent Consumer Financial Protection Agency (CFPA) has been the main impediment for weeks to a Senate compromise on financial regulation reform legislation.

Banks, credit card firms and mortgage lenders would be subject to regulation by the CFPA, which could directly threaten their profits if it moved to force sharp reductions in fees and interest rates charged to financial consumers.

Republicans oppose making the watchdog an independent agency, but have said they could live with it as a unit of a banking regulatory agency. Dodd has been discussing putting it in the Federal Reserve as a possible compromise.

Dodd said on Friday that regardless, the consumer agency will have a lot of authority.

"Where it's housed, where it rents space is important, but more importantly is what authority, what power does it have, how much independence," he said. "And again, I think we're getting a good chance for some strong bipartisan cooperation on that." (Reporting by Karey Wutkowski, editing by Dave Zimmerman)

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Comments (2)
afirebrand wrote:
Posted By: armchairfirebrand (March 5, 2010 at 3:14 AM)

No issue is more critical to ensuring our nation’s long-term economic health than addressing America’s dysfunctional financial regulatory system. Unfortunately, like so much legislation lately, the Obama administration’s economic reform agenda has fallen victim to prolonged partisan gridlock in the Senate.

As a compromise, Senate Banking Committee chairman Chris Dodd (D-CT) suggested burying the agency within the existing framework of the Federal Reserve.

However, even this major concession isn’t enough to satisfy Senator Richard Shelby (R-AL). The senior senator from Alabama’s stubborn refusal to adopt common sense consumer protections provides further evidence of the Republican Party’s prime directive: protecting the interests of large banks, corporations and the rich at the everyday American’s expense.

Passing a financial regulatory reform bill that includes both the Volcker Rule and an independent Consumer Financial Protection Agency is essential to preserving our nation’s economic stability.

The statements of a former Federal Reserve chairmen, Five former Treasury secretaries, a Wall Street CEO, at least one U.S. Senator and a Nobel prize winning economist all attest to this. Richard Shelby and his fellow Republicans owe the American people an explanation as to why they obtusely refuse to accept these crucial reforms.

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Mar 05, 2010 12:42pm EST  --  Report as abuse
BrianJDonovan wrote:
Anyone who questions the need for financial reform should read “How Credit Derivatives Brought the U.S. Economy to the Brink of a Second Great Depression,” available at:

Mar 05, 2010 2:33pm EST  --  Report as abuse
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