Dodd To Propose Removing Fed, FDIC Supervision

Interesting. So Dodd's proposal would effectively remove Sheila Bair's role as one of the few senior administration officials advocating for consume

chrisdodd_f3c39.jpg

Interesting. So Dodd's proposal would effectively remove Sheila Bair's role as one of the few senior administration officials advocating for consumers. (We already know bankers don't like her.) Still, it sounds like a few good ideas here, I'll wait to see how this shakes out.

Nov. 10 (Bloomberg) -- Senator Christopher Dodd will propose creating a single U.S. regulator that would strip the Federal Reserve and Federal Deposit Insurance Corp. of bank-supervision authority, said a person familiar with the matter.

Dodd, chairman of the Senate Banking Committee, would eliminate the Office of the Comptroller of the Currency and the Office of Thrift Supervision and fold the Treasury Department units into the new bank regulator, according to the person, who spoke on condition of anonymity because the plan isn’t public. The Connecticut Democrat is scheduled to release a draft of his financial-regulation overhaul plan today in Washington.

“It makes sense to have one regulator that deals with supervision,” Gilbert Schwartz, a former Fed attorney and a partner at Washington law firm Schwartz & Ballen LLP, said in an interview. “You’ll see a real battle by the Fed and the FDIC to retain their supervisory authority.”

Dodd has faulted the U.S. bank regulation system, saying it encourages charter shopping and a “race to the bottom” by agencies to win oversight roles. His proposal goes further than proposals by President Barack Obama and House Financial Services Committee Chairman Barney Frank to merge the OTS and OCC.

[...] Dodd will also propose creating a Consumer Financial Protection Agency, a council of regulators to monitor large firms for disruptive effects on the industry and the economy, and giving the FDIC power to unwind failed firms whose collapse in bankruptcy could shake the economy, the person said.

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