WASHINGTON — Senate Banking Committee Chairman Chris Dodd on Friday said he would introduce a revised regulatory reform bill this month after negotiations with the panel's senior Republican broke down.
"Last night, Senator [Richard] Shelby assured me that he is still committed to finding a consensus on financial reform, but for now we have reached an impasse," the Connecticut Democrat said in a press release. "While I still hope that we will ultimately have a consensus package, it is time to move the process forward. I have instructed my staff to begin drafting legislation to present to the committee later this month."
Talks collapsed between Dodd and Shelby over how best to improve consumer protection, according to sources close to the negotiations.
Dodd had reportedly showed willingness to compromise with Shelby by agreeing to forgo an independent agency and simply establish a robust consumer division within a new national bank regulator or under the Treasury Department.
Consumer groups have insisted that any consumer entity must be independent, and Dodd has agreed it should have strong powers such as the ability to write rules, but Shelby has argued that consumer protection should not trump safety and soundness and has opposed a powerful consumer regulator, sources said. Dodd said earlier this week during consideration of last-minute administration proposals to limit the risk and size of large institutions that he did not "want to go to the floor of the United State Senate begging for a 60th vote."
Dodd hinted at his frustration in a hearing Thursday where he said it was time to put pen to paper and move a bill.
"We are at a critical point here. I laid out my discussion draft in November, and members of this committee have been working together, across the aisle, to come up with some sort of compromise ever since," he said. "And now we are getting to the point where we need to pull the trigger, because hard-working American families can't wait much longer for a return to economic security.... I am as determined as ever to bring a strong bill to the floor of the United States Senate."
During the same hearing Shelby reiterated his oft made point that it's more important to get regulatory reform right than it is to do it quickly.