As efforts to produce a bipartisan deal on sweeping financial regulatory reform legislation inch forward, Senator Bob Corker (R-TN) offered an alternative proposal that aims to end the impasse over one of the legislation’s most controversial issues – consumer financial protection. Though sources reported this morning that the offer is gaining traction, a final agreement remains elusive.
Senator Corker’s offer comes in response to the financial reform proposal circulated by Senate Banking, Housing and Urban Affairs Committee Chairman Christopher Dodd (D-CT) last Friday, and largely resembles the Chairman’s proposal. The key difference focuses on where the new consumer protection regulator would be located.
Chairman Dodd’s proposal sought to house the regulator within the Treasury Department – a move that top Republican negotiators wholly rejected. Senator Corker’s new offer, on the other hand, would place the consumer financial protection unit within the Federal Reserve – a location that has been met with Democratic criticism due to perceived lapses in the Fed’s past handling of consumer protection issues.
Should Chairman Dodd accept Senator Corker’s consumer protection proposal – an issue that has proven to be a pivotal part of moving a large scale financial reform bill forward – it would mark a significant concession, given his past statements of frustration over the Fed’s track record on consumer oversight and protection. It would also indicate the Chairman’s recognition that he may not get a better offer from Republicans, whose support is necessary now that Democrats no longer have a 60 vote supermajority in the Senate.
As negotiations continue, legislation could be introduced as soon as this week, paving the way for committee consideration to begin this month. We will continue to monitor this fluid situation and provide updates on InsureReinsure.com.