Tester: support Chris Dodd's financial regulation legislation

by: Jay Stevens

Fri Nov 20, 2009 at 14:36:41 PM MST

Dodd said outdated rules leave regulators unable to keep pace with the industry.

"Our financial regulatory system, created piece by piece over decades with little thought given to how it would function as a whole, is simply unable to prevent staggering greed and unthinkable recklessness from threatening our economic security," said Dodd....

Dodd's legislation would create a single bank agency aimed at preventing regulator "shopping" by firms seeking lenient oversight. He also proposed setting up a systemic-risk agency and a Consumer Financial Protection Agency to police firms for credit-card and mortgage lending abuses.

The bill would also remove the bank oversight powers of the Fed and FDIC and create a Consumer Financial Protection Agency, whose function would be to monitor and regulate financial institutions and the products they offer, including credit cards, mortgages, and other traded investments:

Under the proposed legislation, the agency would have the power to monitor the financial marketplace, including loans and credit cards, with consumers' interests top of mind. Existing agencies that have that power today have other industry monitoring responsibilities as well.

The agency would focus on making sure financial product disclosures are easy to understand so consumers know what they are getting themselves into as well as on financial literacy education and research. It also would have the power to write rules and enforce them on issues such as arbitration for credit card disputes.

The bill has hit a familiar snag: "centrist" Democrats, and nay-saying Republicans.

One of the Democrats on Dodd's Banking Committee is Jon Tester. In recent statements, Jon's reaffirmed his commitment to ensuring that "members of the insurance industry" have their "feet to the fire," and that national financial institutions are "held accountable" while local banks aren't subject to excessive regulation. One way he can be true to his rhetoric is to support Dodd's banking bill when it comes up to vote....