Where will reform go without Dodd?
TEXT OF INTERVIEW
Steve Chiotakis: Senate Banking Committee Chairman Christopher Dodd is expected to announce later today he’s retiring. The Connecticut Democrat was a key figure in the government response to the financial crisis, including some legislation to tighten oversight. Marketplace’s Nancy Marshall Genzer is with us live from Washington. Good morning, Nancy.
Nancy Marshall Genzer: Good morning.
Chiotakis: So what was Senator Dodd’s role in the wake of the crisis?
Marshall Genzer: Well, he sponsored a bill just this past November that would do a number of things. It would create a consumer financial protection agency and impose new controls on credit rating agencies and some of those risky investments that led to the financial crisis. It would also take away the power of the Fed to regulate banks. So that means the Fed wouldn’t be able to directly examine or supervise bank holding companies like Morgan Stanley or Bank of America. And Dodd’s bill would also strip the Fed of its authority to shut down a troubled bank.
Chiotakis: And why would he be retiring now?
Marshall Genzer: Well, Dodd’s been under a lot of criticism from people who say he got a sweetheart deal on a mortgage from Countrywide Financial, and of course Countrywide was one of the biggest issuer of subprime loans. Dodd also took a lot of heat for his contribution to legislation that seemed to make it easier for executives of American International Group to get bonuses.
Chiotakis: And Nancy, what happens to the financial reforms Dodd proposed in his bill?
Marshall Genzer: Well, Reuters is reporting today that some key senators are close to a bipartisan deal on some aspects of Dodd’s bill — namely keeping the Fed out of banking regulation. But you know, even if agreement is reached in the Senate, the House still has to be convinced, and it has already passed a financial reform bill — and that measure does not strip the Fed of its bank regulation powers.
Chiotakis: Hmmm. All right, Marketplace’s Nancy Marshall Genzer with us from Washington. Nancy, Thanks.
Marshall Genzer: You’re welcome.
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