efforts to reform the financial industry
Dodd is eager to shed his image of being too cozy with bankers. He's received more than $8 million from financial firms since 2005, according to the Center for Responsive Politics. Plus he's come under fire for bowing to political pressure from the financial industry. Earlier this year he admitted weakening a stimulus bill provision that allowed insurer AIG, based in his home state of Connecticut, to pay out big bonuses to employees.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Dodd’s new financial plan is certainly no sop to bankers, and it may help him show that he is not beholden to them. His sweeping proposal seeks to remake the entire financial services landscape. Banks would report to one powerful regulator that sets capital standards and monitors their overall risk portfolio. They would also have to answer to a consumer protection agency to ensure their lending practices are fair. That’s in addition to creating a more powerful Securities and Exchange Commission, and a host of reforms that curb speculative trading and rein in other major financial firms.
In the end, many of Dodd’s proposals won't get very far. In his zeal to prove his populist stripes, Dodd is actually jeopardizing the chances that his bill will ever make through the Senate. It faces stiff resistance from both existing regulators and bank lobby groups. And with the legislative calendar quickly drawing to a close, the Senate has little time to reconcile major ideological differences. Republicans don't like the idea of a consumer protection agency. Even moderate Democrats will oppose stripping the Federal Reserve of its bank supervisory powers and eliminating other regulators. Even if he succeeds in the Senate, Dodd would then have to hammer out a compromise with the House, which has its own plan in the works.
Financial reform won’t get to President Obama's desk until early next year. By then, the most ambitious of Dodd's ideas will be long gone. The only regulator that stands of chance of being eliminated is the Office of Thrift Supervision. And a consumer protection agency might have to be significantly watered down to get Republicans on board. Dodd’s staff says they’ve been working on these ideas for months. But if they wanted reform they would have done better to start out with a more pragmatic approach, rather than one that simply puts on a good show.
-
Think You Know How to Be Happy in Retirement? These 9 Stats May Surprise YouWhen it comes to your retirement happiness, don't believe everything you hear. We've turned to solid research for the facts on finding your bliss in retirement.
-
If You're Retired or Soon to Be, Don't Miss These Tax BreaksThe OBBB offers some tax advantages that are particularly beneficial for retirees and near-retirees. But they're available for only a limited time.
-
Waiting to Retire to Give to Charity? 3 Reasons to Do It NowYou could wait until retirement, but making charitable giving part of your financial plan now could be far more beneficial for you and the causes you support.
-
Airbnb Host Tells What It's LikeBusiness Costs & Regulation This Denver pharmacist began booking her ski condo a few months after the pandemic hit.
-
Tough Times for a Family BusinessBusiness Costs & Regulation His dry-cleaning operation was rocked by the pandemic, but he is staying optimistic.
-
IRS Gives Truckers a Tax Break in Response to the Colonial Pipeline ShutdownTax Breaks The tax penalty for using dyed diesel fuel for highway use is temporarily suspended.
-
Reliving a Harlem RenaissanceBusiness Costs & Regulation After a tough winter, two sisters look forward to reviving their restaurant’s business.
-
Add a VPN to Surf the Internet SafelyTechnology To help you fight identity theft, consider adding a VPN.
-
Stephanie Creary: Making the Case for Diversity on Corporate BoardsBusiness Costs & Regulation Adding underrepresented voices can improve a company’s bottom line.
-
Kiplinger's 2020 Election ForecastPolitics For nearly a century, The Kiplinger Letter has forecasted the outcome of presidential elections to keep readers informed of what's coming and what it means for them. Here's our call for 2020.
-
How We Lose When We Overlook Black TalentBusiness Executives Comments from Wells Fargo CEO Charles Scharf (pictured) reflect a culture that tramples on clients’ trust and limits opportunities for people of color.
