September 09, 2009

Lobbyists for banks big and small expect Senate Banking Committee Chairman Chris Dodd (D-Conn.) and other panel members to offer measures that would go further than the Obama administration in overhauling the existing regulatory scheme.Community banks that think their regulatory system works well fear Congress will push them under a single regulator with big banks.

Large banks don’t want a single regulator either, and argue that stripping the Federal Reserve, which is unpopular on Capitol Hill these days, will take the Fed’s attention away from other critical matters. The regulators are nervous, too. Federal Deposit Insurance Corporation (FDIC) Chairwoman Sheila Bair penned an op-ed in the The New York Times last week opposing the concept of a single regulator.