Dodd proposes sweeping financial reforms

After months of hearings and negotiation, U.S. Sen. Christopher J. Dodd, D-Connecticut, today proposed financial legislation that he called the “most significant reform since the 1930s.”

“It creates a sound economic foundation to grow jobs. It protects consumers. It reins in Wall Street. It ends too-big-to-fail, and it prevents another financial crisis of this magnitude,” Dodd said.

The Senate Banking Committee chairman, who is in the last year of a 30-year Senate career, said his complex, 11-part, 1,336-page bill delivers a simple message to financial institutions:

“Never again will the American taxpayers write a check to pull your chestnuts out of the fire. That’s over with.”

Dodd released the bill and a summary of the legislation this afternoon at a press conference in Washington, then held a conference call with Connecticut reporters.

He defended his decision to break off negotiations with Republicans last week and finish a drafting a bill that will be considered by the Banking Committee next week.

“I’ve spent weeks trying to develop consensus around some of these ideas,” Dodd said. “We cannot delay any longer. We’ve got to get the job done.”

Dodd said a majority of the bill has bipartisan support, and his intent is to force up-or-down votes on the portions that remain contentious.

The bill installs in the Federal Reserve what some Democrats had hoped would be a stand-alone consumer protection agency. Dodd said he does not have the votes for a new consumer watchdog

“Other than an independent agency, this is the best place,” he said of the Fed.

Dodd said the Fed would have new powers to protect consumers against hidden fees, abusive terms and deceptive practices.

The bill also would create would Dodd called a system of disincentives, coupled with stronger regulatory oversight, intended to discourage financial firms from growing too large.