WASHINGTON - The Senate Banking Committee yesterday approved Senator Christopher Dodd's plan to overhaul financial regulations, advancing the Obama Administration's call for the biggest restructuring of Wall St since the 1930s.
All 10 committee Republicans opposed the measure proposed by Dodd, the Connecticut Democrat who leads the panel, and they declined to offer amendments. The 13-10 vote means negotiations will continue as the legislation moves to the Senate floor.
The final version will probably be easier on Wall St, because Democrats will need to make concessions to win support from Alabama Senator Richard Shelby, the banking panel's top Republican, said Paul Miller, an analyst at FBR Capital Markets in Arlington, Virginia.
The measure proposes creating a consumer protection bureau at the Federal Reserve to police banks for lending abuses and a nine-member council of regulators to identify and respond to risks in the financial system.
Dodd's bill would set up a mechanism for taking apart failing systemically important firms and give shareholders of publicly traded companies a non-binding vote on executive pay. It also includes Volcker rule curbs on banks' proprietary trading and investment proposed by former Fed Chairman Paul Volcker.
Republicans abandoned plans to offer changes to Dodd's bill after realising most of the amendments they filed last week would be voted down, Shelby said.
"Chairman Dodd has made it clear that he intends to move forward without Republican support, which is his prerogative," said Shelby, the banking panel's top Republican.
"We are now one step closer to passing real financial reform that will bring oversight and accountability to our financial system," President Barack Obama said yesterday.
"I will continue to fight to strengthen the bill and against attempts to undermine the independence of" the consumer protection agency.
- BLOOMBERGBy Alison Vekshin