Dodd doesn't think consumer protection agency overreaches

The stage is set for a battle between Senate Republicans and Democrats on a proposed consumer protection agency in the financial regulatory reform legislation. 

Sen. Chris Dodd (D-Conn.) insisted Thursday the bill doesn't reach into Main Street, while Republicans are saying the agency is too sweeping and would hit any small business that uses credit. 

"Nothing could be further from the truth," Dodd said today on the floor. "We're not reaching into it all."

While Dodd said he's willing to accept ideas that strengthen the bill, he soundly denounced accusations that it affects small businesses. 

"We spent a lot of time going through this," he said. "It was worked, by the way, on a bipartisan basis so we could have this feature of the bill."

Proponents of the agency have said that despite oversight by seven regulators, consumers were left largely unprotected during the financial crisis in housing, banking and credit card issues. 

Senate Minority Leader Mitch McConnell (R-Ky.) and Senate Banking ranking member Richard Shelby (R-Ala.) have offered an amendment that would establish a Division of Consumer Financial Protection within the Federal Deposit Insurance Corporation, replacing the Consumer Financial Protection Bureau that Democrats want to establish at the Federal Reserve. 

"We received a letter yesterday from groups representing hundreds of thousands of businesses — from florists to orthodontists to builders to car dealers — all concerned about the potential impact this new agency would have,” McConnell said this morning on the floor. 

“Why on earth would we want to punish small businesses for the reckless behavior we saw on Wall Street?”