March 17, 2010
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On March 22, the Senate Banking Committee passed Chairman Christopher Dodd’s (D-CT) comprehensive financial reform bill, which would: 
 
  • Establish in the Federal Reserve a new independent Consumer Financial Protection Bureau to issue rules, conduct examinations, and impose enforcement actions that are currently carried out by a number separate agencies;
  • Create a Financial Stability Oversight Council to identify, monitor, and address systemic risks posed by large, complex financial firms;
  • Streamline and clarify bank supervision responsibilities;
  • Establish a new Office of Credit Rating Agencies at the Securities and Exchange Commission (SEC);
  • Require companies selling mortgage-backed securities to retain at least 5 percent of the credit risk, unless the underlying loans are low-risk; and
  • Require SEC registration of municipal financial advisers, swap advisers, and investment brokers. 
 
The bill would also require the head of the SEC’s municipal securities office to report directly to the SEC chairman and modify the composition of the Municipal Securities Rulemaking Board (MSRB) to include at least eight public members, including at least one representative of institutional or retail investors, one issuer, and one municipal market expert; at least one representative from a securities firm; at least one from a bank; and at least one from a non-dealer municipal adviser.  By statute, the MSRB is currently comprised of 10 dealer firm representatives and five public members, including one issuer and one investor representative.
 
The text of the bill, a brief summary, and a section-by-section summary are available on the Banking Committee website. 
 
Though the Committee passed the bill on a party-line vote, Democrats and Republicans said they would continue to discuss their remaining disagreements in hopes of reaching a bipartisan agreement by the time the Senate consider the bill later this year. 
 
President Obama has urged the Congress to enact a financial reform bill as soon as possible. The House passed its financial reform bill last December.