20091110 christopher dodd 18
Senate Banking Committee Chairman Christopher Dodd, D-Conn., talks about his proposed financial reform legislation during a news conference at the U.S. Capitol on Nov. 10, 2009. - 


Kai Ryssdal: You know when you have to refill the printer at the office? And you grab one of those packages of paper from the carton underneath? That's 500 pages, a ream of paper. Put two of those reams together, you still don't have enough pages to print out the latest plan to regulate the financial industry.

Senate Banking Committee Chairman Christopher Dodd released his reform bill today -- 1,136 pages in all. The draft I saw this morning took five pages just to list the cast of characters, all the various regulators and government officials. And therein lies the problem. There's no one person or agency in charge of keeping an eye on the financial system. Senator Dodd lays out his fixes in those 1,100 pages. We gave Marketplace's Steve Henn a minute and 45 seconds to make it make sense.

STEVE HENN: One of the big problems during the subprime boom was that mortgage underwriters didn't hold onto billions in risky mortgages they helped create. So when those mortgages failed they didn't lose a dime. Sen. Dodd would change that.

SEN. DODD: We will require companies that sell products, such as mortgage-backed securities, to keep so-called skin in the game so that they won't sell worthless securities to unsuspecting investors.

Dodd would also create one unified federal bank regulator. Right now bank supervisors come in at least 54 flavors. Every state has its own agency, and Washington offers up an alphabet soup of its own: the OTS, the OCC, the FDIC, and the Fed.

Dodd's bill would trim the choices. And Rick Carnell, a former banking regulator who's now a professor at Fordham, believes Dodd's bill does a better job than the administration proposal at preventing the next crisis.

RICK CARNELL: He makes it harder to bank on a bailout.

Carnell says while one agency would police the banks another would just write the rules. He argues this simplified structure will make it easier to head off crises before they get out of control.

CARNELL: And that includes making it easier to make decisions that will be unpopular with the industry.

Like the House, Dodd also wants to create a new consumer financial products agency. Consumer advocates, like Susanna Montezemolo, at the Center for Responsible Lending argue this consumer watchdog would ultimately protect banks.

SUSANNA MONTEZEMOLO: Many of the practices that have been most harmful to consumers in the long run have been very bad for the businesses themselves.

Still Dodd's bill is likely to draw fire from community banks, credit card companies, and others. It doesn't have a single Republican backer and is likely to be amended many times before it finally comes to a vote next year.

In Washington, I'm Steve Henn for Marketplace.

Ryssdal: One more item falling under the purview of the chairman of the Senate Banking Committee before we move on. Senator Dodd said today he thinks Ben Bernanke will be confirmed for a second term running the Federal Reserve sometime before Christmas. Bernanke's current appointment expires at the end of January.