Senate Plan Would Expand Regulation of Risky Lending

[Ardent15]

WASHINGTON — The chairman of the Senate banking committee proposed on Tuesday to drastically overhaul the regulatory system by consolidating bank agencies, creating a consumer financial protection agency and imposing new restraints on exotic financial instruments and credit rating agencies.

The 1,136-page plan by Senator Christopher J. Dodd, a Connecticut Democrat, differs in major respects from both the White House and House plans. Even before it was made public, it had encountered sharp resistance from Republicans and powerful business interests in Washington. With only a few weeks left in the legislative session, it is all but certain that Congress will not deliver on President Obama’s request to repair the financial regulatory system by the end of the year unless major compromises are quickly struck.

Still, the long-awaited Senate plan is significant as a starting point for the lawmakers, who are increasingly talking about trying to complete legislation during the first three months of 2010. While the measure will inevitably be revised during weeks of behind-the-scenes negotiations, it lays down the first marker by Mr. Dodd and other senior Democrats on the banking committee.

Mr. Dodd has said he hopes to move the bill through the banking committee in the next few weeks. In recent days he has been rewriting major portions to gain support from more Democrats on the committee.

<http://www.nytimes.com/2009/11/11/business/11regulate.html?_r=1&hp>