Dodd Says Time Limits Led Him To Move Bill Without GOP Okay

NU Online News Service, March 11, 4:17 p.m. EDT

WASHINGTON–Senate Banking Committee Chairman Chris Dodd, D-Conn., said he did not think there was time enough to work out a bipartisan financial services legislation so he was moving his own bill.

In comments to reporters this afternoon, Sen. Dodd emphasized that he was working against the "101st Senator– the clock" to get a measure passed this year.

He said he will introduce his bill Monday, and that the new legislation would look "very different" than his initial draft proposals back in November.

He also said he expects a markup a drafting session for the legislation that will be held the following week.

He said that he ended talks with Sen. Bob Corker, R-Tenn., because the process was taking too long and he was concerned that continuing the dialogue with Sen. Corker and others would limit the possibility of passing a bill.

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

In his comments, Sen. Corker kept saying that they were "at the 5-yard line" with respect to passing a bipartisan bill, including agreement on the important issue of consumer protection.

He cited derivatives regulation as a particular sticking point.

He also said that 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 industry, 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 preserves state regulation of insurance, including consumer protection provisions.

In his comments, Sen. Dodd commended Sen. Corker for his commitment to achieving bipartisan consensus, but stressed that time was running out.

He refused to give any definite dates for completion, citing his desire to "get it right."

He also alluded to pressure from the White House, saying that the Administration cares deeply about financial services regulatory reform and 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 was still a strong likelihood a bill will ultimately be enacted.

For example, Sen. Corker in his remarks said he will continue to work with Dodd and his staff.

And, Jaret Seiberg, an analyst at Concept Capital in Washington, D.C. called the decision to introduce a bill by Sen. Dodd as "progress."

Mr. Seiberg explained that 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."

What the administration calls the Volcker Rules would restrict banks from speculative investments that fail to benefit customers and limit the largest banks' ability to use borrowed money for expansion.

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," Mr. Seiberg said. "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," he added.

And several experienced insurance industry lobbyists, representing both the life and property and casualty industries, agreed that introduction of a bill is a key part in the process of getting a bill enacted.