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Regulation and Compliance > State Regulation

Dodd To Go Solo On Financial Services Bill

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WASHINGTON BUREAU — Sen. Christopher Dodd says he has pulled the plug on efforts to develop a bipartisan financial services bill because of concerns that time is running out.

In comments with reporters this afternoon, Dodd said he is working against the “101st senator– the clock” in getting a bill passed this year.

He said he will introduce a bill Monday, and that the new bill will look “very different” from the draft he proposed in November 2009.

He also said he expects a markup of the bill will be held the following week.

He said that he cut off talks with Sen. Robert Corker, R-Tenn., because the process has been taking too long and because he is concerned that continuing the dialogue with Corker and others would limit the possibility of passing a bill.

Dodd met with reporters several hours after Corker met with reporters to lament Dodd’s decision to end talks.

In his comments, Corker said he and Dodd were “at the 5-yard line” with respect to passing a good bill.

Corker cited derivatives regulation as a sticking point.

He said there was apparent agreement on two issues of concern to the insurance industry: Eliminating the notion of “too-big-to-fail,” and enabling an early warning system for detecting systemic risk in the economy.

But, he said, he was unable to achieve bipartisan agreement on the last issue of concern to the insurance, creating greater transparency and accountability in the derivatives markets.

The fourth critical issue, creation of a consumer protection agency, is not of interest to the insurance industry because the bill would keep insurance consumer protection regulation in the hands of state insurance regulators.

Dodd praised Corker for his commitment to achieving bipartisan consensus, but he said time is running out.

Dodd refused to give any definite dates for completion of work on the financial services bill, citing his desire to “get it right.”

Dodd also alluded to pressure from the White House, saying the administration cares deeply about financial services regulatory reform. Dodd said he has spoken with the Treasury Department almost every day over the last few weeks and months.

While some reports said the decision to introduce a unilateral bill “dim” hopes for passage of legislation this year, others said there is still a strong likelihood a bill will ultimately be enacted.

Corker in his remarks said he will continue to work with Dodd and his staff.

Jaret Seiberg, an analyst at Concept Capital, Washington, is calling Dodd’s decision to introduce his own bill “progress.”

Work on the bill is a “political process, and Dodd was never going to be able to cut a deal before the committee vote on contentious issues such as the Consumer Financial Protection Agency, the Volcker Rules or a resolution fund,” Seiberg says.

By ending negotiations and pushing the bill through on a party-line vote, “Sen. Dodd can finally start to bring this process to a close,” Seiberg says. “As we have often argued, Dodd and Sen. Richard Shelby, R-Ala., have a long history of cutting a deal just before a bill goes to the full Senate. We believe that will happen in this case.”


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