A key piece of President Barack Obama’s plan to prevent another economic meltdown already has slowed in Congress, and Democrats acknowledged today the task may be tougher than initially thought.
Rep. Barney Frank, chairman of the House Financial Services Committee, has delayed plans to take up during the first week of May a bill that would enable the government to wind down failing financial institutions like insurance giant American International Group.
The creation of a “resolution authority” was considered a relatively easy first step in the effort to revamp government oversight of the financial system.
Frank spokesman Steve Adamske said the bill would come up at a later date as part of a broader bill that would name a federal regulator to monitor risk across the financial system.
“We’re not going to be able to move as quickly as we thought,” said Adamske, but “it doesn’t mean it won’t get done.”
President Barack Obama and congressional Democrats have vowed to overhaul banking regulations by the end of the year. They say that had regulations been tighter in recent years, banks would not have taken many of the risky bets that ultimately put them in danger of collapsing and in need of a $700 billion government bailout.
Sen. Christopher Dodd, chairman of the Banking Committee, said in an interview today that he remains committed to tightening industry rules this year. But he also acknowledged that the work load is daunting for a Congress trying desperately to get its arms around the financial crisis.
On Wednesday, the Senate voted to create both a congressional panel and a $5 million independent commission to investigate the economic meltdown in the next 18 months. Meanwhile, Congress also is advancing legislation that would ban certain practices by credit card companies, target predatory lending and prosecute mortgage fraud.
“We’ve got a lot on our plate,” said Dodd. (AP)
