A DEMOCRAT SENATOR is defending sweeping financial reforms he recently unveiled, which would strip the Federal Reserve of its broad and unchallenged authority while reining in a greedy Wall Street.

On Nov. 10, Sen. Chris Dodd (D-Conn.), chairman of the Senate Banking Committee, introduced his financial overhaul bill called the Restoring American Financial Stability Act of 2009, a massive bill that comes in at just over 1,100 pages.

Dodd, who is up for reelection in 2010, is in serious trouble in his home state after it was revealed that he had received sweetheart loans from banks and mortgage brokers that have been blamed for toppling the U.S. economy. Once viewed as Wall Street’s man in the Senate, Dodd is now trying to initiate a crackdown to save his hide. His bill addresses some of the more predatory, disreputable and legally questionable practices that have been commonplace in the financial industry.

Among other things, the bill tasks one federal regulator with overseeing the entire banking industry, including operations that are carried out by the Federal Reserve. It establishes new rules for “transparency and accountability” from investment advisors, financial brokers and credit rating agencies to protect investors and businesses. It sets up new rules for corporations to go to shareholders to vote on compensation for executives. It creates a new independent consumer financial protection agency that will monitor mortgages, credit cards, and other financial products for hidden fees, “abusive terms” and “deceptive practices.” Finally, it gives the

federal government the power to break up the money trust, especially when it threatens to bring down the entire economy.

Not surprisingly, Wall Street’s toadies in government went on the offensive against the bill calling it an expansion of the Big Brother mentality to the financial sector.

In a speech to the American Bar Association’s Banking Law Committee, the Treasury Department’s second in command, Neil Wolin, echoed this sentiment, saying that the Federal Reserve “is the only agency with broad and deep knowledge of financial institutions and the capital markets necessary to do the job effectively.”

Dodd responded to his critics by noting that “for decades, Washington has failed to deliver the substantial reform we need. If we fail again this time, our economy will be vulnerable to another crisis. . . . The American people deserve an economy in which Americans can find jobs, manage their money, and build better futures for their families. They deserve the real and meaningful change in this bill.”

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