WASHINGTON — Senate Banking Chairman Christopher Dodd (D., Conn.) said Friday that a consumer-protection entity created by a proposed financial-regulatory overhaul should have the power to make new rules, regardless of whether the agency is independent.
While questions about a possible consumer-protection agency have focused on the agency's placement in the federal bureaucracy, Dodd said he is "more concerned about what powers it has" and suggested that rulemaking should be one of those powers. Dodd made the remarks in an interview on Bloomberg Television's "Political Capital with Al Hunt." The interview was taped Friday and is to be broadcast this weekend.
"What I think you've got to have, certainly, is some rulemaking authority," Dodd said.
Dodd, along with Sen. Bob Corker (R., Tenn.), is in the process of crafting a yet-unreleased bill that aims to restructure financial regulations in order to avoid the kind of crisis on Wall Street that fueled a major recession in 2008 and 2009.
Dodd said that, with a consumer-protection agency, "you want to have a consultative role" between "consumer-protection regulators" and federal banking regulators.
While he said that his "preference" would be for the consumer-protection agency to be independent and that Democrats largely support an independent agency, Dodd said little to suggest that a proposed agency would be independent. Some lawmakers have suggested that the new entity could be part of the Treasury Department.
Dodd suggested that the agency would still have its own funding stream, however, along with "an independent head of it nominated by the president, confirmed independently by the Senate."
When asked how the Federal Reserve would fare in the regulatory-overhaul legislation, Dodd said the central bank would "not necessarily" have to cede all of its power to oversee banks. He said "there could be" a compromise on the issue."