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Steve Chiotakis: Sometime this week Senator Christopher Dodd of Connecticut will introduce a bill laying out his idea about how to reform America’s financial system. Marketplace’s Steve Henn reports Dodd’s thinking is very different from what the banking industry wants.

Steve Henn: Senate Banking Committee Chairman Chris Dodd thinks the Fed should get out of the business of banking regulation. But big banks don’t like that idea at all.

Scott Talbott is at the Financial Services Roundtable.

Scott Talbott: We like the Fed as a regulator. We think they tend to be very rational and very thoughtful and that is something… those are qualities that you look for in regulators.

But critics say banks and the Fed were too cozy. The Fed failed to police the mortgage market for years and didn’t see this crisis coming in time to stop it. Talbott argues the Fed’s changed.

Talbott: They’ve already proposed new credit card rules. They’ve already proposed new overdraft rules and they have already proposed new executive comp rules. And that is just in the last couple of months.

But Sen. Chris Dodd and others argue the Fed has enough on its plate just managing monetary policy. And they says it needs to remain independent from politics to do that job well.

In Washington, I’m Steve Henn for Marketplace.