Senate Financial Reform Bill Leaves Communities at Lenders’ Mercy

By Kai Wright Mar 15, 2010

Retiring Sen. Chris Dodd is rolling out his revised bill for reforming financial regulations today and the general consensus is… it’s a bust. Dodd broke off negotiations with Republicans on the Banking Committee last week, raising hopes that he’d craft a bill that would set the reform debate on a meaningful track. Instead, reformers are already deeply disappointed as details trickle out about the bill he’ll reveal at a press conference this evening. At the debate’s outset, reformers were hopeful Washington would take big steps to rein in the financial services firms — from payday lenders to subprime mortgage brokers — that swarm struggling neighborhoods all over the country. President Obama proposed a new Consumer Financial Protection Agency, tasked with broadly looking out for consumers rather than minding the health of banks. Dodd’s bill will create that agency in name, but give it little of the power reform advocates hoped for. The two big questions about a consumer watchdog are 1) will it be independent from existing regulators and 2) will it have strong enforcement power. Dodd’s answers, according to AP, are no and not really.