Senator Christopher Dodd (D-Connecticut) is set to unveil a financial reform bill that gives more power the Federal Reserve and includes "legislation tougher on financial companies than was expected just a few weeks ago" (Wall Street Journal) and a "new government watchdog for financial consumers [to] be housed within the Fed" (Reuters). And, to make matters more exciting, Politico says, "Neither side will be satisfied by what Dodd's offering, and particularly the left."
President Obama had wanted the consumer protection agency, the Consumer Financial Protection Agency, to be stand-alone, but Dodd put it inside the Fed like the GOP wanted. The agency would write rules on credit cards and mortgages, and the NY Times reports, "In a concession to liberals, states’ attorneys general could sue violators of those rules, and the agency would have enforcement powers over large banks, mortgage originators and servicers, and other large lenders." However, the consumer rules could be overturned by another "council of regulators" (a Republican idea).
Additionally, the bill will give the Fed oversight of bank-holding companies "and other firms with assets over $50 billion that pose a systemic risk to the system," like AIG.
