Senator Christopher Dodd, chief negotiator for the Democrats in talks on a bipartisan financial reform bill in the U.S. Senate, on Friday said lawmakers are not there yet on reaching an agreement but said he hopes one will be reached within days.
Debate over the level of independence of a consumer financial product watchdog is holding up other needed reforms, Dodd said in an interview with CNBC Television.
He speculated that it has become a sticking point because the public can relate to 32 percent credit card interest rates and big prepayment penalties on mortgages.
The subject matter of derivatives and swaps, and the issues of systemic risk and 'too big to fail' seem somewhat removed from the general public, Dodd said.
Regarding the $15 billion jobs bill that the House of Representatives passed on Thursday, Dodd said the Senate will respond favorably to the package of tax credits and highway construction.
He sees Senate action early next week on the bill. If the Senate passes it, it will then go on to President Barack Obama to sign it into law.
Dodd also spoke about the Obama administration's willingness to force healthcare reform through Congress by using reconciliation.
That process allows legislation to pass through a simple majority vote in the 100-member Senate rather than the 60 votes needed to clear Republican procedural hurdles.
I would prefer we didn't go reconciliation, Dodd said.
But he also said the importance of the issue trumps the controversy of the process used to get it passed.
HOLDING OUT HOPE
He said he is more hopeful that bipartisan work on financial reform will be successful.
We're getting there, but we're not there yet, but I feel very optimistic we will, Dodd said.
Obama's proposal last year to create a stand-alone, independent Consumer Financial Protection Agency (CFPA) has been the main impediment for weeks to a Senate compromise on financial regulation reform legislation.
Banks, credit card firms and mortgage lenders would be subject to regulation by the CFPA, which could directly threaten their profits if it moved to force sharp reductions in fees and interest rates charged to financial consumers.
Republicans oppose making the watchdog an independent agency, but have said they could live with it as a unit of a banking regulatory agency. Dodd has been discussing putting it in the Federal Reserve as a possible compromise.
Dodd said on Friday that regardless, the consumer agency will have a lot of authority.
Where it's housed, where it rents space is important, but more importantly is what authority, what power does it have, how much independence, he said. And again, I think we're getting a good chance for some strong bipartisan cooperation on that.
(Reporting by Karey Wutkowski, editing by Dave Zimmerman)