Dodd wants Democratic support for consumer protection regulator at Fed
By: Binyamin Appelbaum and David Cho
03/01/2010

The Washington Post

The chairman of the Senate banking committee is seeking Democratic support for a Republican proposal to house a new consumer protection regulator inside the Federal Reserve, a compromise that could clear the way for bipartisan legislation on financial reform, according to sources familiar with the negotiations.

Embracing the proposal marks a turnaround for Sen. Christopher J. Dodd (D-Conn.), who has lambasted the Fed repeatedly over the past year for not protecting borrowers from lender abuse. It is unclear whether other Fed critics, both Democrats and Republicans, will follow suit. The Fed already is responsible for writing consumer protection rules, but it did not prohibit some of the most abusive mortgage and credit card lending practices during the housing boom.

The proposal by Sen. Bob Corker (R-Tenn.) would place a presidential appointee inside the Fed with an independent budget and a mandate to write rules protecting consumers. Those rules, however, would be enforced by existing banking regulators.

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http://www.washingtonpost.com/wpdyn/content/article/2010/03/01/AR2010030102049.html?hpid=topnews