The reform bill unveiled yesterday by Senate Banking Committee Chairman, Christopher Dodd (D. Conn), that gives the Federal Reserve a reduced role in banking oversight.
"I really want the Federal Reserve to get back to its core enterprises," Dodd said. "We saw over the last number of years when they took on consumer protection responsibilities and the regulation of bank holding companies, it was an abysmal failure. So the idea that we're going to go back and expand those roles and functions at the expense of the vitality of the core functions that they're designed to perform is going in the wrong way."
Dodd’s bill, which he calls a “sweeping, bold, comprehensive, long overdue” restructuring of the financial regulatory regime, is more than 1,000 pages and undertakes issues such a the creation of a single bank regulator and a Consumer Financial Protection Agency to regulate credit cards and home mortgages.
The bill also takes bank supervision away from the Federal Deposit Insurance Corporation, the 50 state banking supervisors, and the Federal Reserve.
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