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Dodd Moves Ahead on Financial Reform Without GOP

Senate banking committee chairman Christopher Dodd (D-Conn.) said negotiations on a bipartisan regulatory reform bill for the financial sector have "reached an impasse" and as a result he will move forward with a revised version of his draft legislation first unveiled in Novermber.

Senate Banking, Housing and Urban Affairs Committee Chairman Christopher J. Dodd (D-CT) and ranking member Sen. Richard C. Shelby (R-AL)
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Senate Banking, Housing and Urban Affairs Committee Chairman Christopher J. Dodd (D-CT) and ranking member Sen. Richard C. Shelby (R-AL)

“While I still hope that we will ultimately have a consensus package, it is time to move the process forward," said Dodd in a statement Friday.

Dodd and the committee’s ranking GOP member, Richard Shelby of Alabama, have been waging negotiations of their own for weeks. The two met at least twice this week, including Thursday evening, according to sources.

“Last night, Senator Shelby assured me that he is still committed to finding a consensus on Financial Reform, but for now we have reached an impasse," Dodd said in a statement.

CNBC.com first reported the imminent possibility of Dodd going it alone Thursday, at which time Dodd was said to be prepared to move ahead on a non-partisan basis with what might be considered a more moderate version of his original bill--an approach that could garner enough support to move it out of the banking committee.

Dodd's statement today confirmed that, saying he had "instructed my staff to begin drafting legislation to present to the committee later this month.”

A senior Congressional staffer familiar with the Democrats' legislative agenda said that Dodd has been "very reasonable" with Republicans and that it was "appropriate to move forward."

The source also expected Dodd to "incorporate some of the bipartisan deals" reached during two months of negotiations.

Among the key sticking points is the issue of consumer protection. Dodd’s original draft bill in November contained the creation of a new, powerful agency to handle the role, similar to that in the House’s version, which was approved on the floor in late 2009.

Republicans are opposed to that approach, although they acknowledge the need for some new measures.

"Consumer protection is not the only issue that remains unresolved," Shelby said in a statement. "We must craft a resolution regime that ensures taxpayers will never again bear the losses for risks taken in the private marketplace. I will not agree to any legislation until I am satisfied this goal is also achieved."

According to one industry source, Dodd's revised draft could be unveiled as soon as Monday, but Congressional sources say the end of the month is most likely.

Both Shelby and Dodd said they remained hopeful a bipartisan deal could still be reached.