Finance Space

The betting is that Congress will pass a financial regulatory reform bill.

It’s hard to claim — as some in the financial industry do — that, almost two years after the system’s near collapse, Congress is moving with undue haste. One might hope that out of this slow, deliberative process would emerge a finely tuned bill, weighing the benefits of regulation with potential costs.

But this delay was the financial industry’s strategy. It hoped that with an economic recovery, calls for reform would fade and it could return to business as usual.

The Obama administration plans to begin a public debate next month on how best to overhaul Fannie Mae, Freddie Mac and the nation’s housing finance system.

Officials say they will proceed with reform based, in part, on the principles that borrowers should be able to get home loans even during periods of economic distress and that low-income people should not be excluded from financing to buy homes.

Democratic Senator Christopher Dodd must pitch lawmakers Monday to support a bill aimed at overhauling America’s complex web of financial regulation.

Combining Obama administration and Republican priorities, the leading Senate author of a sweeping rewrite of the nation’s financial regulations is looking for consensus with a proposal that neither side of the political spectrum is ready to embrace.

The bill trumpeted by the chairman of the Senate banking committee will reportedly expand the powers of the Federal Reserve and create a consumer protection entity with less authority than President Barack Obama initially demanded.