Dodd Unveils Sweeping Financial Overhaul Bill

Chris Dodd introduced a sweeping financial regulation bill that creates no fewer than three new agencies to oversee the banking industry. Dodd’s bill creates an Agency for Financial Stability to identify systemic risks to the economy as a whole. It entrusts all bank supervision to the Financial Institutions Regulatory Administration, stripping the Fed of its oversight role and emergency-lending powers, which it used to save firms during the financial crisis. The Fed would instead focus entirely on monetary policy.

Dodd’s bill also calls for a Consumer Financial Protection Agency to oversee consumer products. A House version would give the director of the CFPA wide unilateral powers, while Dodd's envisions a five-member panel—a change applauded by the financial industry. But Dodd’s bill also gives states the power to enact tougher consumer protections than the CFPA, which banks complain will lead to an messy patchwork of regulations, the Wall Street Journal reports.