Gregg also blasted the bill's new consumer protection agency, which he warns will turn the business of loan-making into an advocacy program.
"It's going to become an agency which defines lending on social justice purposes as versus on safety and soundness of purposes," he said, adding, "So you'll basically have a consumer agency which decides to go out in the morning, say, well everybody who is X, Y, Z should have a loan, even though the local community banks say X, Y, Z shouldn't have a loan because if we give them a loan, we know they're not going to pay [it] back."
He also said the derivatives portion of the bill had an "Alice in Wonderland tea-party-type atmosphere" about it by forcing the U.S. credit market to move offshore.
"They'll even become less controllable in the sense of having oversight," he said.
"If you talk to the Treasury on the phone, which I did regularly through this process — I've been sort of charged with the derivatives side — they tell you that what this bill did on derivatives was disastrous. You had the FDIC [Federal Deposit Insurance Corporation] telling you that; you had the OCC [Office of the Comptroller of the Currency] telling you that; you had the Fed regulatory agencies telling you that," the senator said. "And yet there was a tacit of, well, let's go forward anyway and we'll fix it somewhere in the future."
The bottom line for Gregg is that the bill scores more political points than addresses reform.
"This bill became a populist rant, 'I want to score the most points I can against Wall Street-type of bill,'" he said, adding, "That's what the purpose of this bill became and so most of the initiatives in this bill wasn't directed at resolving the problem, which actually created the issue, it was directed at scoring political points."