We all know that Chris Dodd, a politician with normally progressive instincts, is somewhat suspect when it comes to the financial industry. He isn't a Blanche Lincoln or Ben Nelson, not even close. But he tends to give the "views" of the financial industry more weight when crafting legislation than he would any other industry.
It's with this backdrop that his posture over the past month has started to concern me. It began with him scrapping his originally proposed legislation for Financial reform, which was similar to what the House passed, in order to get bipartisan support and get Richard Shelby, of all people, to join in. The moment he announced his desire to have legislation Shelby could endorse I had serious doubts about Dodd's seriousness in actually fixing the problem with with a good reform bill. Shelby, for those who don't know, is an extreme free market conservative. To his credit, he was willing to let the banks go down in the fall of 2008 with the belief that the free market would take care of itself. Thats how gung-ho this guy is about his free market principles, he doesn't leave much room to negotiate. So right off the bat we knew anything he would accept would have to be watered down and for all intents and purposes useless.
Then 2 weeks ago a story broke that Dodd was planning on scrapping the proposed Consumer financial protection agency in order to, not surprisingly, appease Shelby:
Senate banking committee Chairman Sen. Christopher J. Dodd (D-Conn.) has discussed jettisoning plans for a standalone Consumer Financial Protection Agency, as part of an effort to secure bipartisan support for legislation to reform financial regulation, said people familiar with the matter.
Soon after this news filtered out, Elizabeth Warren, a big champion of the CFPA, started speaking out and shortly met with the Obama administration. Then Obama himself held a one on one with Dodd in which he reportedly told him the CFPA was non-negotiable. So we started hearing less of this idea and it seemed that was the end of that.
But then earlier this week Dodd, in what seems like the result of 2 weeks of bottled frustration, lashed out against the administration saying the Volker rule was too ambitious and could derail financial regulation, that the president was attacking the banks too much and that the administration has not been taking his advice on the proper way to get financial reform done. It was pretty amazing to see Dodd actually publicly make a sympathetic plea for the banking industry, who I'm sure has been harassing him non-stop.
Thanksfully, it seems because his hand was forced on the CFPA, him and Shelby are at an impasse and for now, the idea of a bipartisan plan on financial regulation may be dead. But I'm getting very concerned because its starting to become obvious that Dodd's instincts are not to get the best reform package possible but something else, maybe a political victory instead of a policy one.
Please call Dodd @ (202) 224-2823. Tell him we will not accept some watered down version of reform...or, to coin an old phrase, lipstick on a pig.