Dodd to unveil financial overhaul legislation

Sen. Chris Dodd (D-Conn.) will unveil wide-ranging financial overhaul legislation as early as next week.

Dodd, chairman of the Senate Banking Committee, has spent months trying to craft a bipartisan bill behind the scenes with Sen. Richard Shelby (Ala.), the senior Republican on the panel.

But Democrats and Republicans have clashed on numerous parts of the financial overhaul.

The administration is urging lawmakers to pass legislation this year or early in 2010 to fulfill one of President Barack Obama's leading domestic priorities.

Dodd will unveil a discussion draft as early as next week and plans to hold a markup of legislation as early as the week of Nov. 16, said Kirstin Brost, spokeswoman for the Senate Banking Committee. The markup will likely last several days and stretch until after the Thanksgiving.

The action comes as House lawmakers eye a vote on the financial overhaul in the first week of December. House Financial Services Committee Chairman Barney Frank (D-Mass.) is now marking up controversial legislation reining in "systemic risk" that would also grant the federal government broad powers to reduce the size and scope of large financial institutions. The legislation aims to limit the moral hazard associated with firms that are "too big to fail."

Dodd and Shelby have clashed publicly about the need for a new federal agency overseeing consumer financial products. Dodd has backed the new Consumer Financial Protection Agency (CFPA), which was already marked up in Frank's panel, while Shelby and other Republicans strong oppose it.

Marking the most significant break with Frank and the Obama administration, Dodd has called for the consolidation of the nation's four banking regulators. Frank and the regulators, including Federal Deposit Insurance Corporation (FDIC) chairwoman Sheila Bair, have criticized the proposal.

An administration official on Tuesday expressed some openness to the proposal, but the administration has not publicly supported or called for the consolidation of the regulators. The provision is expected to face significant opposition.

Dodd has also supported publicly a council to oversee systemic risk and has criticized the Federal Reserve for failing to adequately regulate firms in the run-up to the financial crisis. Under Frank's proposal, the Fed would be granted enhanced powers to regulate large financial institutions.