The so-called "Volcker Rule" is unlikely to play a large role in the Senate's financial regulation reform bill, Sen. Chris Dodd (D-Conn.) said Thursday.

Dodd, the chairman of the Senate Banking Committee, said that senators are likely to let regulators pursue the rule, which limits the extent to which financial institutions can engage in proprietary trading.

"I can't write regulations, this is way beyond the competency of Congress," Dodd said during an appearance on Bloomberg News.

The Volcker Rule, eponymously named for former Federal Reserve Chairman Paul Volcker, was endorsed by President Barack Obama earlier this year as part of his financial reform package. The proposal, which is similar to the 1933 Glass-Steagall law, is meant to reduce the risk, size and complexity of large financial institutions.

Dodd said he's reached out to different regulatory bodies to see what capacity they have to make similar regulations, in leiu of legislation to pursue such a rule.

"The business community needs certainty on this issue," he said. "We ought to leave it to them to make the recommendations."

The Banking chairman also addressed the prospects for where any consumer protection agency would be housed, amid reports that some committee members favor placing it within the Federal Reserve.

"I think what we're talking about here is an independent office or bureau," Dodd argued. "Where that's located is less relevant. What existed in the past is an authority under the control of the Fed."