Reporting from Washington — Less than a week after declaring an impasse in bipartisan negotiations to overhaul U.S. financial regulations, Senate Banking Committee Chairman Christopher J. Dodd (D-Conn.) said he's now working with a new Republican partner: Sen. Bob Corker of Tennessee.
The inclusion of Corker injects new hope in the Obama administration's attempt to enact the most sweeping reforms since the Great Depression to try to prevent a repeat of the 2008-09 financial crisis.
"For over a year, the Senate Banking Committee has been grappling with how best to address the many problems that led to the financial crisis," Dodd said. "In that time, Sen. Corker has proved to be a serious thinker and a valuable asset to this committee. For that reason, I called him Tuesday night and asked him to negotiate the financial reform bill with me."
Dodd said they met in his office Wednesday night -- a feat in itself given the blizzard that struck the nation's capital -- and that Corker agreed to work on drafting a bill.
"An impasse had been reached. It looked to me like a legislative train wreck was building, and I think this is something we need to deal with," Corker said Thursday. "On behalf of our country, surely this is an issue we can solve on a bipartisan basis."
Dodd has been trying to craft a comprehensive overhaul of the financial regulatory system, a priority of President Obama. But he knows he needs some Republican support to get a bill through the Senate.
The House passed a major regulatory overhaul in December that, among other things, would create a Consumer Financial Protection Agency and give the government broad new power to seize and dismantle large financial firms should their failure pose a major risk to the economy and to break up such firms preemptively should regulators deem them too large. But that bill passed without a single Republican vote.
Corker has a history of working with Democrats. He tried to negotiate legislation in late 2008 to help U.S. automakers struggling with the financial crisis.
And Corker has been one of handful of Republicans working with Democrats on the committee to negotiate key portions of the regulatory overhaul. Corker has been teamed with Sen. Mark Warner (D-Va.) on hammering out the details of a new government "resolution authority" that would allow regulators to seize and dismantle teetering firms in an orderly way, similar to how the Federal Deposit Insurance Corp. winds down failing banks.
Dodd and Sen. Richard Shelby (R-Ala.), the committee's top Republican, had been working on perhaps the most controversial part of the legislation, the new consumer agency. But those talks stalled last week. At the time, Corker said the impasse would not affect his efforts to push for a bipartisan bill.
Corker, who also strongly opposes a stand-alone consumer agency, said he suggested to Dodd on Thursday that they put that issue aside until all the other components of the bill are negotiated. Corker said a compromise could be worked out under which existing regulatory agencies would get an expanded consumer protection mandate.
"I think this legislation is something that is important, I think it should be done, and I hope we'll figure out a way to get to a bipartisan place," he said.