Dodd to unveil financial reform bill
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TEXT OF INTERVIEW
Steve Chiotakis: Sen. Christopher Dodd today goes public with his plan to prevent another banking crisis. The Senate Banking Committee Chairman’s plan is expected to put more oversight in the hands of the Federal Reserve. And it’ll create some kind of consumer protection agency. The bill faces steep opposition from the GOP. Marketplace Washington bureau chief John Dimsdale is with us live this morning. Good morning, John.
John Dimsdale: Good morning, Steve.
Chiotakis: What do we know about Senator Dodd’s version of this bill?
Dimsdale: The most contentious issue is still just how much power to give that financial consumer protection agency. Democrats want a powerful, rule-making agency that would avoid a repeat of the financial crisis. Republicans, though, say too much consumer protection rules would subject banks to regulations that are not good for their bottom line, that might be in conflict with safety and soundness of the banks.
Chiotakis: So, is there any hope of a compromise, John?
Dimsdale: Senator Dodd has come up with an idea: Give the protection agency strong powers, but create a separate set of regulators who can keep the consumer group in check. Taylor Griffin follows all this as a banking consultant with Hamilton Place Strategies.
TAYLOR GRIFFIN: The compromise that’s been arrived on now is that there would be a systemic risk council — a group of regulators that could veto, with a two-thirds vote regulations issued by the consumer financial protection agency if they are in conflict.
CHIOTAKIS: John, you’ve been covering these reforms since the beginning. What are some of the proposals that caught your eye?
Dimsdale: Yeah, we’ve certainly seen several versions of this reform. In this one, the Federal Reserve would get a lot of powers to oversee the industry. But Sen. Dodd is trying at the same time to make the Fed more independent of Wall Street. For example, the head of the powerful New York office of the Fed would no longer be appointed by member banks, and instead that person would be chosen by the president of the United States.
Chiotakis: And there you go. Marketplace’s John Dimsdale reporting this morning from Washington. John, thanks.
Dimsdale: Thanks, Steve.
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