The Senate Banking Committee unveiled a new bill to reform regulations for the US financial system. The bill, drafted by committee chairman Chris Dodd (D-Conn.), would create the Consumer Financial Protection Agency, which provides consumers information when they shop for mortgages, credit cards and other products. The agency would prohibit hidden fees, abusive terms and deceptive practices. The bill also provides a safe way to shut down large or complex financial companies if they fail. It imposes new capital and leverage requirements and forces the institutions to draft their own “funeral plans.” Dodd made room for the Agency for Financial Stability, an independent agency with a board of regulators, who would identify systemic risks posed by the “too big to fail” companies, products and activities. If the agency finds that a company threatens the economy, it could require that company to divest some of its holdings. New plans of a single federal bank regulator are in the new bill, which would attempt to eliminate overlap and “charter shopping,” where financial institutions choose the easiest regulator. The bill would end fee-funded regulators from “going easy on those they regulate to keep their business,” according to a summary of the bill. “The financial crisis exposed a financial regulatory structure that was the product of historic accident, created piece by piece over decades with little thought given to how it would function as a whole, and unable to prevent threats to our economic security,” Dodd said. Dodd added: “This proposal will create a new architecture to make our financial institutions more transparent, more responsible, and more accountable to the American people. It will address the problems of the past, and look forward to the needs of the future.” The House Financial Services Committee chairman Barney Frank (D-Mass.) congratulated Senator Dodd on the Senate’s version of banking regulatory reform. “Obviously the bills aren’t going to be identical, but it confirms that we are moving in the same direction and reaffirms my confidence that we are going to be able to get an appropriate, effective reform package passed very soon,” Frank said. However, the American Bankers Association (ABA), which represents banks of all sizes and charters, released a statement saying that they even though they had supported extensive regulatory reform, this draft “would tear apart the existing regulatory structure only to create a new one that would produce conflicts among regulators, undermine the state-chartered banking system, and impose extensive new regulatory burdens on those banks that had nothing to do with creating the financial crisis.” The ABA added: “Many experts have correctly said that we need to return home again, focusing on more traditional banking that is based on sound practices and effective regulation. However, Sen. Dodd’s proposal would make this traditional banking home increasingly unlivable.” Write to Jon Prior.