Dodd banking panel choice in U.S. seen as negative for banks
By Kevin Drawbaugh
WASHINGTON, Sept 9 (Reuters) – A decision by U.S. Senator Christopher Dodd to stay chairman of the Senate Banking Committee would increase chances for consumer-oriented reforms that would restrict banks, according to a research report on Wednesday, with a Dodd announcement expected soon.
A Senate aide told Reuters on Tuesday that Dodd will stay
at the banking panel and not take over the Senate Health,
Education, Labor and Pensions (HELP) Committee following the
death of its chairman, Dodd’s friend Sen. Edward Kennedy.
Dodd was expected to announce his decision soon. A
spokeswoman for the Connecticut Democrat said he will appear
before reporters on Wednesday afternoon in the Capitol.
“Senator Dodd’s decision to stay with Senate Banking is a
negative, in our view, for the banks and the financial services
sector,” said Teddy Downey, policy analyst at Concept Capital,
an investment research firm in Washington.
The banking panel and Dodd have a key role to play in an
effort by the Obama administration and congressional Democrats
to tighten regulation of markets and banks, including major
institutions such as Goldman Sachs, Citigroup,
JPMorgan Chase, Bank of America and others.
“We believe Dodd is likely to become more populist in the
next 12 months as he nears re-election,” Downey said.
“That bodes ill for the banks, which are under threat from
legislation that would limit overdraft fees, further regulate
mortgages and create a Consumer Financial Protection Agency
that could sharply curtail how banks interact with customers.
“In brief, the banking sector will continue dealing with a
Senate Banking chairman who needs to show voters that he is not
captive to the financial sector. That is never a positive
development,” he said.
By staying at banking, Dodd would prevent additional delays
in an already bogged-down push for financial reform in response
to the 2008-2009 financial crisis, the worst in decades.
His decision not to replace Kennedy as health committee
chairman would clear the way for Sen. Tom Harkin, who currently
chairs the Senate Agriculture Committee. If Harkin left that
panel, a number of senators could succeed him.
A Harkin spokeswoman said, “Senator Harkin does not have a
decision to make until Senator Dodd announces his intentions.”
Harkin and Dodd have both been deeply involved in recent
weeks in the high-profile healthcare reform debate, assuming
the burdens of the health panel chairmanship as Kennedy
struggled against cancer. He died last month.
“As for who will chair the HELP committee, the favorite is
Senator Harkin and the dark horse is Senator Barbara Mikulski,”
Downey said. “We would be surprised if Senator Harkin does not
take the HELP chairmanship.”
He added, “If Harkin should take HELP, he would leave
behind his Agriculture Committee chairmanship, opening the door
for Senator (Blanche) Lincoln of Arkansas to take over. We
believe that Senators Kent Conrad and Max Baucus, who are next
in line for the Ag post after Harkin, would pass over the
committee to keep their current positions as chairmen of the
budget and finance Committees, respectively.”
Dodd underwent successful surgery for early-stage prostate
cancer in August and is recovering well. He faces a difficult
reelection campaign in 2010 at home in Connecticut.