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Dodd, Corker to work together on financial reform
Dodd's attempt to reach across the aisle comes nearly eight months after the Obama administration unveiled its blueprint for regulatory reform. In December, the House passed its own version, largely modeled on the administration's plan, without a single Republican vote.
His effort also comes as public support for changes to the current system appear to be shrinking. According to a new Washington Post-ABC News poll, a majority of Americans still support stricter federal regulations of the financial industry, but the proportion has slipped over the past year. Overall, 62 percent of those polled back new, tougher federal regulations on how banks and other financial companies conduct their business, but that's down from 76 percent a year ago.
The majority of Americans, regardless of their political affiliation, lack confidence that financial institutions are making changes to lower the risk of crisis, and most Republicans and independents also express little or no confidence that Washington is doing so. By contrast, two-thirds of Democrats are at least somewhat confident that the federal government is putting in place sufficient measures to avert another round of financial upheaval.
In November, Dodd introduced an initial bill that exceeded the reforms proposed by the Obama administration and those passed by the House. It would strip regulatory power from the Federal Reserve and the Federal Deposit Insurance Corp., and create new regulators with sweeping, unprecedented powers.
During a hearing that month, Shelby assailed the draft bill as seriously flawed and unnecessarily rushed. Even Corker expressed reservations, saying the legislation as drafted would cause "pandemonium" in the financial world. "There hasn't been the give and take in creating this bill that there should be," he said.
Corker and Dodd have worked closely before, most notably in late 2008 as they tried unsuccessfully to hammer out a bipartisan rescue of the auto industry. But now the two men confront a far more broad and complex set of issues.
The most divisive issue has remained consumer protection. Dodd and the administration want to create an autonomous new regulator with the power to write and enforce rules aimed at protecting consumers of mortgages, credit cards and other financial products. Shelby and other Republicans have maintained that the same federal agency assigned to supervise the financial health of lenders should also oversee consumer protection.
Corker said Thursday that he would not support a stand-alone new agency, though he thinks the two sides can reach a compromise.
Sen. Mark Warner (D-Va.), a banking committee member who has worked closely with Corker, welcomed the new partnership. "I think this is a good sign. This is too important to fail," Warner said. "We've got to finish this. Time to check your partisan hat at the door on this one."
Dodd said Thursday that whatever anyone thinks of his improbable alliance with Corker, doing nothing would mean that lawmakers "failed to respond to the most significant economic crisis since the 1930s."
His new Republican collaborator agreed.
"The citizens of Tennessee gave me a six-year lease to at least try to deal with issues like this that are complex. I'm going to give it a try," Corker said. "I think there's a strong desire to end up with a bipartisan bill that will stand the test of time."
Polling director Jon Cohen contributed to this report.