Senator. Chris Dodd (Photo: Wikipedia.org)

The people of American are looking for debt relief any way they can find it these days, and it appears that the only way true gains in this area are going to be made is if major restructuring of America’s financial regulatory agencies occurs. Along those lines, controversial Connecticut Sen. Chris Dodd (who some consider to have turned a blind eye to the financial shenanigans that greased the way for the mortgage industry collapse) is hard at work. He wants to push through a new financial reform plan that would completely change the way the government would control banking oversight and debt relief.

Obama Praised Dodd’s Consumer Protection Agency Work

It appeared that Dodd was preparing to take banking regulation and debt relief in an exciting new direction much in tune with the president’s plans. However, recent signs indicate that Dodd’s plan will be significantly different that what was previously expected by the current administration. Specifically, Dodd wants nearly all bank-supervising powers to be removed from the Federal Reserve and FDIC (where they currently reside). An entirely new agency would pick up the reins. They would be responsible for all national finance institutions as sole regulator and guide toward debt relief on both the institutional and consumer level. It would replace the four federal regulatory agencies that exist.

Enter the Watchdog

Watching out for potential risks to the country’s banking and finance industries would become the responsibility of a new kind of watchdog council that would be a chaired by a single White House official. What this would accomplish is to take the teeth out of the Fed’s ability to conceive of consumer protection and debt relief measures on its own. America’s 12 Federal Reserve Banks would also potentially be in jeopardy or closing, according to the Wall Street Journal.

And guess what? In a time when President Obama constantly extols the virtues of bipartisan support, Senator Dodd’s actions could be seen as somewhat extreme. That’s because Dodd is going after his version of the finance reform/debt relief bill on his own. Sheila Bair of the FDIC is against Dodd’s ideas, and the Journal predicts that Senate Republicans will be as well.

The Frank-Man Commeth

Rep. Barney Frank (Photo: Wikipedia.org)

Rep. Barney Frank and the House Financial Services Committee is currently working on its own debt relief and regulation program. According to the Washington Post, Frank’s bill would take a much more conservative approach to regulatory reform. It would get rid of just the Office of Thrift Supervision. At the same time, rather than stripping the Fed of power, it would give them even more power to step in and control the actions of America’s banks.

Consumer Debt Relief Appears to Be Covered

That’s where the Consumer Financial Protection Agency the House has already concocted comes in. Mortgages, credit cards and various consumer loans will fall under that agency’s jurisdiction. Dodd and Frank are battling for a solution to the problems in the banking industry as a whole. Frank estimates the House will vote on his plan by the end of 2009, but Dodd is attempting to push his plan through even sooner than that, perhaps as early as next week if the Washington Post‘s sources are accurate. Get ready for some major debt relief debate, America.

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