Senate Banking Committee Chairman Christopher Dodd's draft bill for sweeping financial reform will consolidate banking regulators, as well as create a systemic risk council and a new consumer watchdog agency within the Federal Reserve, according to a source familiar with the contents of the legislation scheduled to be unveiled Monday.
Senator Bob Corker (R-Tenn.) who's been working with Dodd on a bipartisan bill for more than a month, told CNBC.com Sunday evening that he expected Dodd to "introduce a bill that will be to the left of where we were — close, but left."
Corker called Dodd's draft "a much better bill" than the one the Connecticut Democrat offered in November, but added "he knows that will be a bill I cannot support."
"Hopefully we can offer some amendments in committee and get it back into the middle," he said.
Corker said he last spoke to Dodd Saturday, but the staffs of the two senators has continued to work together through the weekend.
The Dodd bill is scheduled to be unveiled Monday at 2pm ET.
As the Dodd draft now stands, the source said it calls for a new systemic-risk council with a presidentially-appointed chairperson and seven other members. They include the Treasury Secretary as well as the chairs of the Fed, FDIC, SEC and CFTC and a new banking regulator. This council would have the authority to handle the resolution of too-big-to fail firms, according to the source.
The source, who emphasized that some of the components could change before the bill's official release, said it also contained the following:
At this point, the status of less high-profile provisions, remains unclear. They include how new regulation of over-the-counter derivatives would exclude end-users, or firms that use the instruments as a hedge.
The draft bill's provision are very similar to much of what was reported to be agreed by Dodd and Corker during a month of discussions aimed at creating a bipartisan blueprint. In separate news conferences Thursday, Dodd promised as much while Corker discussed the merits of many of the measures that had apparently been hashed out.
At that time, however, Dodd signaled that he was committed to unveiling a bill Monday and a markup of the legislation a week later because "there was not a lot of time left" to move a compliated bill through Congress" during an election year.
Corker and other GOP members sent Dodd a letter Friday urging him to slow down the process, saying the "proposed timetable will not allow members sufficient time to fully understand the details of [the] legislative proposal.
Corker would not discuss the letter, a copy of which was obtained by CNBC.com, except to say, "I can't imagine passing a bill of this magnitude with all the technical issues in a week" and for committee members to know the impact in so short amount of time."
Thus far, the emerging Senate version and the Dodd bill differ in several key ways from reform legislation approved by the full House late last year.
For instance, under that plan, the CFPA would be an independent agency, with a presidential appointed director, subject to Senate approval. The agency would have broad rule-making and enforcement authority.
Two Democratic senators have already said they will submit an amendment calling for a similar structure.
The proposal to put the CFPA under the Fed has already encountered significant opposition from some Senate Democrats as well as House Financial Services Chairman Barney Frank (D-Mass.), who shepherded the bill through that chamber.
President Obama is also an ardent proponent of a a strong, independent CFPA, but it is unclear what his position is on a somewhat watered-down version.
The Dodd proposal, in placing authority under the Fed, eases GOP concerns that a consumer agency might create safety and soundness concerns with the financial system by creating policies that clash with those of other front-line regulators.
In another key difference, the House version of the bill calls for a $150-billion fund based on bank fees to cover resolution of big firms.
Frank has already said that he wants any Senate bill to be reconciled with the House one in a open-hearing, full-conference mode, so voters can follow the votes of participants.
Any bill by Dodd is likely to face opposition at the committee level as well as the full Senate even before reconciliation, all of which will slow down the legislative process.
"I understand the time constraints that Sen. Dodd is under," said Corker.