As has been widely reported, Connecticut Senator Christopher Dodd has announced that will be stepping down from his senate seat at the end of this year and will not be seeking reelection. As the Chairman of the Senate Banking Committee and currently at work on a controversial and difficult "overhaul" of financial regulations in response to the 2008 Wall Street disintegration, will the Senator's retirement effect the outcome of the senate banking bill?
Listening to the variety of voices dissecting Dodd's departure, its difficult to guess whether or not, in the words of the old football cheer, Dodd will lean to the left, or lean to the right. Regardless, he will have to fight to get his hoped legacy of new financial regulations through the Senate. And it is just that desire that might be the best indicator of what he will do.
The financial regulations legislation is complex, but news sources come back repeatedly to three key issues which affect consumers and may be affected by Dodd's actions. The issues are: 1) the new rules for breaking up faltering banks deemed "too big to fail," 2) new regulations to oversee "exotic" financial products such as derivatives, and 3) the proposed consumer financial protection agency.
It is the loss of last, the consumer protection agency, that some think will be the price Dodd and President Obama will have to pay to pass the bill. However, it is one of the proposals that seems to be high on the priority list for both the president and the senator. Since the senator no longer needs the campaign contributions of the financial industry (that he has counted on in the past) he may well stand and fight for this one element of the bill.
The press and pundits have painted Dodd as a wild-eyed liberal bent on saddling banks with heaps of new regulation and alternatively, as conservative lackey for the Wall Street crowd, sometimes both at once. It can be hard for everyone else to discern which caricature is closer to the truth. As with most things in real life, it's likely be a mixture of both and Dodd have to work both sides of the street to get the bi-partisan cooperation he needs to get the bill, in whatever form, passed. But he will, because without it, he will not have the legacy he seeks.