Chistopher Dodd, Key Senator, Unveils Regulatory Reform Plan

Nov. 10, 2009 -- In the wake of the worst financial crisis in generations, the battle over how to reform the system to prevent future meltdowns has fueled numerous proposals -- and today a key lawmaker unveiled a new plan to overhaul Washington's oversight of Wall Street.

At a news conference on Capitol Hill this afternoon Senate Banking Committee Chairman Chris Dodd, D-Conn., released draft legislation that would break in a number of ways from a proposal put forth by House Financial Services Committee chief Barney Frank, D-Mass.

Under Dodd's bill, the Federal Reserve and the Federal Deposit Insurance Corporation would lose many of their bank supervisory powers. In their place, a single bank regulator would be charged with monitoring all banks and bank holding companies, while a new consumer financial protection agency would be created to look out for consumer's rights.

The FDIC would continue to insure bank deposits and handle bank failures, but the Fed would come out looking like a very different agency, without many of its bank supervisory powers and the power to make and enforce consumer protection rules.

While the FDIC would continue to insure bank deposits and handle bank failures, the Fed would come out looking like a much different agency, without many of its bank supervisory powers and the power to make and enforce consumer protection rules, the source said.

In recent months Dodd has openly criticized the Fed's performance in the run-up to the current crisis, bluntly telling Fed chief Ben Bernanke, at a July 22 hearing, "There is a history at the Fed that is deeply troubling to me."

At a July 22 hearing, Dodd bluntly told Fed chief "There is a history at the Fed that is deeply troubling to me."