Updated: 2:50 p.m.
Senate Banking, Housing and Urban Affairs Chairman Chris Dodd (D-Conn.) said Friday he is charging ahead with introducing a regulatory reform measure after months negotiating with Republicans on the committee.
“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. “While I still hope that we will ultimately have a consensus package, it is time to move the process forward.”
Added Dodd: “I have instructed my staff to begin drafting legislation to present to the committee later this month.”
Dodd and Shelby have been in talks for months to reach a bipartisan agreement on a regulatory reform package that could reach the Senate floor this spring, but a handful of sticking points remain. Neither Senator favors the Obama administration’s plan for a consumer protection agency. But Dodd and Shelby are at a standoff over how much power to give the consumer division, according to financial services lobbyists. Dodd wants to give the division more power, while Shelby wants less.
“There are two bedrock principles on which I will not compromise: the safety and soundness of the financial system and taxpayer protection against bailouts,” Shelby said in a statement released Friday after Dodd’s announcement. “I fully support enhancing both consumer protection and safety and soundness regulation. I will not support a bill that enhances one at the expense of the other, however.”
Senate sources said Thursday that talks have grown testy in recent days. But they predicted that Shelby would ultimately be inclined to reach a deal on a bill that will proceed with Republican support.
In a statement Friday, Shelby left the door open for compromise.
“I remain hopeful that a bipartisan agreement can be reached on these and other outstanding issues, including derivatives regulation and corporate governance,” Shelby said. “I remain willing to work with Chairman Dodd to see whether that is possible.”