September 22, 2009

Financial industry lobbyists on Monday denounced a proposal that would eliminate the four federal agencies now overseeing banks and instead create one super-regulator, calling the plan unwieldy, harmful to the banking system and a possible a roadblock to wider financial reform.Sen. Christopher J. Dodd (D-Conn.), chairman of the Senate Banking Committee, is preparing legislation that would merge the bank supervisory powers of the Federal Reserve, the Office of Thrift Supervision, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency.

"It's the wrong way to go," said Steve Verdier, senior vice president for the Independent Community Bankers of America. "We don't think that as far as regulation of banks is concerned, that solves any problems we had. The checks and balances under the current system are pretty good."Banking industry representatives said they fear that a single regulator would focus on the nation's largest banks to the detriment of thousands of community bankers.