Federal Reserve will be abolished? Senator Christopher Dodd hopes for this...

A top Democratic senator is preparing plans that, if approved, would pull together the major four bank agencies in the U.S. into one regulatory agency, according to media report.

Christopher Dodd, the chairman of the Senate Banking Committee, is drafting legislation that would combine the Federal Reserve, the Office of Thrift Supervision, the Federal Deposit Insurance Corporation and the Comptroller of the Currency into one superagency, the New York Times reported Saturday in its online edition.

The proposal by Dodd, D-Conn., is aimed at acting as a springboard for the Senate to craft a new financial landscape in the wake of the financial crisis.

"We clearly need to put in place an architecture that restores confidence and makes people feel that when they engage in financial activities, from making a bank deposit to buying insurance or investing in stock, that they can have confidence in the system," the newspaper quoted Dodd as saying in an interview on Friday.

Dodd's overhaul differs from what President Barack Obama envisions, as it would diminish the role of the Federal Reserve to act as a systemwide overseer, according to the report.

The White House had considered combining the major agencies, but backed away from the idea to prevent heavy industry opposition that might slow the reform process in Congress.

Dodd's proposal is likely to face opposition from bank regulators, who have already raised objections about Obama's more-modest plan.

In line with Obama's plan, Dodd supports the creation of a financial protection agency that would write and enforce rules to protect consumers from abusive or deceptive terms offered by credit cards and mortgage lenders, the Times reported.

Source: MarketWire