Sen. Chris Dodd (D-CT) is set to retire from his job at the end of the year, but he's not expected to go without overhauling the financial regulatory system.
Dodd and the Senate Banking Committee he heads have been working behind closed doors to rewrite the rules governing Wall Street. The question now is: How will his departure affect the direction of the legislation?
In his retirement announcement in Connecticut on Wednesday, Dodd said that after nearly 30 years of enjoying voter confidence, he finds himself in the toughest political shape of his career.
"Let me quickly add that there've been times when my positions and actions have caused some of you to question that confidence," he said. "I regret that, but it is equally important that you know that I've never wavered in my determination to do the best job — to do the best job for our state and our nation."
Dodd took heat in early 2009 for a provision in the stimulus package allowing insurance giant AIG to give out billions of dollars in executive bonuses.
He also faced a Senate ethics investigation into whether he received special mortgage deals from Countrywide Financial, a lender at the center of the subprime mortgage crisis. Dodd was cleared of any wrongdoing.
However, Quinnipiac University pollster Doug Schwartz says the damage was done. "It looked like he was too cozy with the financial industry. The AIG bonus controversy — another example of him perhaps looking like he was too cozy with the financial industry. So those kinds of things really hurt him."
Dodd spent much of last year trying to repair the damage by boosting consumer-friendly issues such as the passage of new credit card regulations. And his initial drafts of the financial regulatory overhaul were stronger than those of the House or the Obama administration.
So when Dodd announced his retirement, did the financial industry cheer or boo?
"Neither," chuckles lobbyist Scott Talbott of the Financial Services Roundtable.
"Many have argued that he'd moved to the left — to hard left," Talbott says. "Many argue that that's in result of the politics and the need to prove or demonstrate to Connecticut voters that he's a populist. With the election removed, those forces will be removed from the equation and, therefore, might make it easier to craft a bipartisan [regulatory] reform bill."
Dodd scrapped his initial draft and is now deeply involved in a bipartisan rewrite. Industry-backed concessions are expected in areas such as the proposed resolution authority to wind down banks considered too big to fail and on a proposed consumer financial protection agency.
But consumer lobbyists like Travis Plunkett remain optimistic about Dodd's role. "It's also an incentive for him to speak his mind. To call the issues as he sees them — to stop special-interest deals that the public doesn't know about but that harm their interests."
And economist Vince Reinhart of the American Enterprise Institute says Dodd's retirement improves the chances of passing a bill. "He's taken this opportunity to create his legacy, to put a capstone to it — namely, significant financial reform. So my betting actually is he will be more aggressive. He will be more ambitious."
The White House is counting on as much. On Wednesday, a spokesman said the administration wants a bill by the end of the year.