Financial Reform Legislation Introduced in Senate
Yesterday, Sen. Christopher Dodd, D. CT, introduced legislation to reform the nation’s financial system.
“The Leadership Conference applauds Senator Dodd’s dedication to bringing real reform to Wall Street, and for elevating the importance of civil rights protections within the new consumer protection bureau,” Nancy Zirkin, executive vice president of The Leadership Conference, said.
Civil rights and consumer advocates were pleased that Dodd proposed a new bureau, within the Federal Reserve, that would have broad regulatory powers to protect consumers from abusive lending practices that led to the current recession. The bureau would also have a civil rights office, focused exclusively on fighting discriminatory lending.
However, Dodd’s bill does not create a stand-alone agency, which civil rights and consumer groups have long supported. The key risk in the new strategy is that existing banking regulators may be able to overrule the bureau’s pro-consumer decisions. The House passed a bill in December that creates a more freestanding, independent consumer protection agency.
Dodd’s approach reflects the challenging task of getting a bill through the Senate. If the Senate passes the bill, the differences between it and the House-passed bill will have to be worked out.
Zirkin said that while the Dodd bill is “a step in the right direction, it is of critical importance that the agency be fully independent and cover all types of loans. The Leadership Conference will continue to advocate for the strongest financial protections for the American people.”