Senate Banking Committee Chairman Christopher Dodd Monday unveiled a new, more moderate blueprint for sweeping financial reform in an attempt to win bipartisan support.
At an afternoon news conference, Dodd revealed highlights of a new bill, calling it "comprehensive in its scope," and addresses the "failures" that led to the financial crisis of 2008-2009.
The blueprint has 11 major components, covering such diverse areas as banking, hedge funds, derivatives, executive pay and insurance.
Dodd said his bill would end the "too-big-to-fail" concept, protect consumers, limit risk-taking, and rein in compensation packages.
The Dodd plan reconfigures banking regulation; creates a new consumer watchdog for financial products as well as a systemic-risk council with the authority to handle the resolution of too-big-to-fail firms; and introduces new safeguards against risk-taking in the marketplace.
Dodd has been working closely with several GOP committee members, most notably Bob Corker of Tennessee, after his original draft bill was essentially dead on arrival in November.
Corker said the bill "has a number of policies I cannot support, but I will continue working through the amendment process in committee and on the floor to hopefully make it a bill that can receive broad bipartisan support."
"This proposal provides a strong foundation to build a safer financial system," President Obama said in a statement. "As the bill moves forward, I will take every opportunity to work with Chairman Dodd and his colleagues to strengthen the bill and will fight against efforts to weaken it."
Here's a summary of the key components.
The systemic risk council would have nine members, chaired by the Treasury Secretary. With a two-thirds majority vote, the council could force "a large, complex company, to divest some of its holdings if it poses a grave threat to the financial stability of the United States," according to the plan.
The new structure would create "a safe way to liquidate failed financial firms; imposing tough new capital and leverage requirements that make it undesirable to get too big," the outline stated..
The Consumer Financial Protection Agency, CFPA, would have an independent budget with a chairman appointed by the president. It would have rule-making, examination and enforcement authority. The CFPA would be housed under the Federal Reserve, which "does not have one iota of authority over it," Dodd said.
The CFPA would have "authority to examine and enforce regulations for banks and credit unions with assets of over $10 billion and all mortgage-related businesses." according to the plan.