Dodd cites 'impasse' in regulatory reform negotiations

Negotiations over the scope of the Senate's forthcoming financial regulatory reform bill have "reached an impasse," Senate Banking Committee Chairman Chris Dodd (D-Conn.) said Friday.

Consequently, Democrats are prepared to begin drafting that bill, a version of which passed the House last year, and plan to introduce it for committee markup by the end of this month, Dodd said. However, he stressed he still hopes "we will ultimately have a consensus package" by the end of the committee process.

The impasse Dodd cited Friday involves his proposal to establish a tough Consumer Financial Protection Agency, according to a source familiar with the situation.

While Dodd would prefer an agency with "teeth," Ranking Member Richard Shelby (R-Ala.) and other committee Republicans sought a much weaker consumer panel, the source explained.

Ultimately, the two sides could not agree on the proposed agency's size, scope or independence, as well as how much rule-making authority it might have, despite months of close negotiations. By contrast, the House's financial regulatory reform bill does include a strict consumer protection panel.

Still, the committee's members have stressed recently that they have come to number of agreements on the bill's other key components -- compromises that Democrats' forthcoming proposal will retain, according to a source close to the talks.

Dodd himself emphasized that quality on Friday, praising Shelby for his work so far on the bill and noting rather explicitly that the ranking member is "still committed to find a consensus."

“I appreciate the good work that has been done to this point by Senator Shelby and the other Banking Committee members who have worked so hard in this process," Dodd said. " Over the past two months we have had productive bi-partisan negotiations in a number of areas and I intend to incorporate many of those agreements in this new proposal.”

---