Dodd Blames Crisis on Regulators

The current financial crisis is a direct result of federal regulators that encouraged risky lending practices and ignored consumer protection, according to Senate Banking Committee chairman Christopher Dodd, D-Conn. "The lessons of this crisis are already becoming clear," Sen. Dodd said during a committee hearing on the genesis of the economic crisis. "Never again should we permit the kind of systematic regulatory failures that allowed reckless lending practices to mushroom into a global credit crisis. Never again should we allow federal financial regulators to treat consumer protection as a nuance or of secondary importance to safety and soundness regulation," the Connecticut senator said. Congress is expected to enact tough mortgage lending standards next year and revamp the financial regulatory system. "If we learn one thing from all of this, it is that the consumer remains the backbone of the American economy and that consumer protection and safe and sound operation of financial institutions are inextricably linked," Sen. Dodd said. The House Financial Services Committee will be looking at financial regulatory issues at an Oct. 21 hearing.