Senate Banking Committee Chairman Christopher Dodd and Ranking Member Richard Shelby announced that they have reached an impasse in their bipartisan efforts to craft a comprehensive financial markets regulatory reform bill. It is believed that their talks fell apart over whether an independent consumer protection division within a regulatory agency could have rule-making authority. Senator Dodd had previously agreed to scrap a proposal for a new independent agency the Consumer Financial Protection Agency, in favor of an independent consumer protection division within a financial regulatory agency. In December 2009, the House of Representatives passed the Wall Street Reform and Consumer Protection Act of 2009, which would establish an independent Consumer Financial Protection Agency. No Republican members of the House voted for the bill.The Senate Banking Committee had formed four bipartisan working groups to address specific regulatory reform subjects. Senators Dodd and Shelby worked on consumer protection and prudential banking regulation; Senators Jack Reed and Judd Gregg worked on derivatives and credit-rating agencies; Senators Mark Warner and Bob Corker worked on the resolution of major financial institutions; and Senators Charles Schumer and Michael Crapo worked on executive compensation and corporate governance. Senators Dodd and Corker have announced they will continue to work on the bipartisan legislation, setting aside for the moment consumer protection issues. Senator Corker stated that he was willing to be the lone Republican vote for financial markets regulatory reform, but that he believes the Senate Banking Committee will draft a bill that other Republicans would be comfortable supporting.
Alert February 16, 2010