Democratic Senator Chris Dodd has put forward his long-awaited financial reform legislation. Dodd's plan, revised from his original November proposal, is deemed "the most sweeping overhaul of financial regulations since the Depression." Dodd, who heads the Senate Finance Committee, announced in January he would not seek another term. He and other Democrats have long advocated tight regulation of Wall Street in the wake of the financial crisis, attracting the populist elements of the Tea Party right. But can he gain political support in time to pass financial reform? And are the proposals any good?
- What Dodd's Bill Does The Atlantic's Marc Ambinder lays out the four components that "will change the way banks and business do banking and business." (1) "Corporate governance -- giving shareholders proxy votes to influence executive pay and the selection of boards of directors." (2) Establishing the Consumer Financial Protection Agency (CFPA), which we explore here. (3) Limiting banks from getting "too big to fail," which remains hazy. (4) Regulations on derivatives.
- Big Winner: The Fed Time's Stephen Gandel is surprised. "There was a time in the months following the financial crisis where there seemed to be a strong movement from both the left and the right to restrict the power of the Fed. Even Dodd was for a smaller Fed. But now it looks like the Fed's role is expanding, not shrinking." However, "Giving more power to the Federal Reserve is not my ideal solution, but it is better than what we have."
- Don't Empower The Fed The Washington Post's Ezra Klein says a consensus is emerging against putting the CFPA within the Fed. It's a concession to Republicans--Democrats oppose giving the Fed more power in the kinds of regulation the CFPA will be doing. But it hasn't gained any Republican votes. And even "the advisory council that watches the Federal Reserve's consumer-protection activities" has come out against it.
- 'Difficult Road' To Passage The Atlantic's Dan Indiviglio evaluates the bill point-by-point, deciding that the political prospects are grim. "Even after it gets out of committee, Dodd needs to sway at least one Republican to vote for the bill, which might not be easy, given that Senate Republicans view his effort as rushed after he abruptly ended bipartisan compromise. Indeed, it could even be difficult to get all Democrats on board."
- Too Many GOP Concessions Think Progress' Pat Garofalo can't believe Dodd is still trying to lure Republican votes. "With no GOP help forthcoming, it’s unclear why Dodd feels the need to retain the compromises that he made with Corker. If Republicans have already predetermined that they won’t join in, why not put forward a strong bill and force them to vote against it? There are enough Democrats on the banking committee to move a bill forward, and once it reaches the floor, some of the more moderate Republicans may be enticed into voting for it, while the rest will have to openly display their animosity toward financial reform and consumer protection."