Dodd’s Reform Bill Expected Today

Posted by Orb Staff on March 15, 2010 No Comments
Categories : Residential Mortgage

Sen. Chris Dodd, chairman of the Senate Banking Committee, will release his financial reform bill today, which is expected to propose keeping consumer protection responsibilities with the Federal Reserve.

Additionally, Dodd's bill, which the outgoing senator will present with no apparent backing from Republicans, would also empower the Fed to supervise any bank or financial institution with more than $50 billion in assets. A former proposal floated on Capitol Hill carried a $100 billion threshold.

The Wall Street Journal reports that Dodd will propose that the Federal Deposit Insurance Corp. regulate state-chartered backs that fall below that threshold, while a national bank regulator would oversee national banks with less than $50 billion in assets.

Dodd's bill is also expected to require the nation's largest financial companies to pay into a $50 billion fund that would be used to dismantle failing institutions that are deemed systemically important.Â

With respect to the Fed's consumer protection division, Dodd's bill will likely propose that the federal watchdog set a rules "floor," off of which state regulators could build their own rules.

Rep. Spencer Bachus, R-Ala., told the New York Times this weekend that Republicans will push for the Senate bill to include an end date for the conservatorship of Fannie Mae and Freddie Mac.

"Financial regulatory reform legislation will not have any meaningful impact on ending taxpayer bailouts if the cost of operating the GSEs is allowed to continue to rise and the level of taxpayer support is allowed to grow," Bachus said in a statement Thursday.

Adding in his weekend interview with the Times, Bachus said, "If the Senate or the administration doesn't address [the GSEs] then, like they failed to do with the budget, we will most definitely look for any way to ensure it is included. Be assured that GSEs have been, and continue to be, high on our agenda for regulatory reform. How can you address the housing meltdown and fiscal crisis without covering those responsible for 90 percent of mortgage financing?"

SOURCES: Wall Street Journal, New York Times

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