Sen Dodd sees Wall St reform approval

WASHINGTON (Reuters) - The U.S. Senate's lead lawmaker on Wall Street reform said on Wednesday he expects a massive rewrite of financial regulations to overcome procedural hurdles as soon as Thursday and go on to win final approval.

Democratic Senator Christopher Dodd told Reuters it was possible that the bill might win the support of "one or two" more Republican senators, in addition to those already backing it.

"I'm always the cautious one, but I believe we're OK," Dodd said on the outlook for final votes on the bill.

At least 60 senators in the 100-seat chamber must back the measure in a procedural vote that will likely occur around 10:30 a.m. (1430 GMT) Thursday. A vote on final passage could come soon after.

The House of Representatives has already passed the 2,300-page bill, which would impose tough new rules on Wall Street and the banking industry to try to prevent a repeat of the devastating 2007-2009 financial crisis.

Some key Senate Republican moderates -- Olympia Snowe, Susan Collins and Scott Brown -- have expressed support for the measure, likely pushing it over the 60-vote threshold.

"I'm deeply grateful to Olympia Snowe and Susan Collins and Scott Brown," Dodd said. "There's always a possibility we may end up with a vote or two more on the Republican side.

"Based on where I am with the Democrats, I think we're at the magic number. I've had no room, really. I've been on the razor's edge with this. So I believe we're OK."

Dodd said the Senate Banking Committee, which he chairs, may hold hearings later this year on regulators' plans for implementing the bill.

The bill would curb risky trading by banks, set up a new government process for dismantling troubled financial giants and create a financial consumer watchdog.

FANNIE, FREDDIE CITED

He added that it is vital for Congress to deal with housing finance giants Fannie Mae and Freddie Mac, two troubled institutions whose futures are not mapped out by the bill. "I'll be the first to admit this is a major area that must be addressed," said Dodd.

But trying to deal with Fannie and Freddie in the Wall Street reform bill would have been unwise, he said.

"It wasn't as if we weren't aware of it. But does anyone really know what they want to do? No one really does.

"Strangling it or just getting rid of it right now would be a disaster. ... It clearly has to be addressed, but if I had held up this bill to try to address that, we never would have dealt with it. The bill would have collapsed."

Dodd, who is not seeking re-election in November, added: "I'm happy to sit around in October or November, if you want to have a series of hearings on the various ideas that are out there ... as to what do you replace Fannie and Freddie with."

Fannie and Freddie together own or guarantee half of all U.S. mortgages. Both were seized by the U.S. government and put into conservatorship in September 2008.

(Additional reporting by Andy Sullivan; Editing by Leslie Adler and Dan Grebler)