Anyone who has been angry about bank bailouts needs to know Christopher Dodd. Dodd is the chairman of the Senate Banking committee and helps to draft legislation that relates to why your favorite bank might have needed government intervention. He also plays a key role in the process of determining how to provide oversight to banks and deciding who should provide that oversight. Our government stopped monitoring corporate behavior appropriately under President Bush, so it’s now time for a new regime.

Dodd has achieved a major victory by getting his legislation past the Senate Banking Committee. The vote was along party lines, and opens the door to a bigger fight on the Senate floor. Dodd’s bi-partisan efforts stalled, as his negotiations with key Republicans broke down and left him going at it alone. Given that this is just one day after the House of Representatives passed a landmark health care reform initiative, it appears that the nation now has something new to think about.

Managing risk in our economy is a funny thing. In Finance 101, we teach our students that greater risk means greater reward. So, when times are good, they are really good (see most of the last decade). But when times are bad, they’re terribly bad (consider the last year and a half). Given that our banking system was front and center on the list of factors which led to the economic crisis that may have cost you your job, the legislators now have the grim task of controlling that risky behavior.

The first thing Dodd plans to do is reduce the amount of risk that banks can take by no longer allowing them to trade for their own accounts or manage hedge funds. The high risk act of trading for themselves helped banks to ride high during the economic boom, only to ask the country for a bailout when things got rough. Banks were out of control in their decision-making, and the only thing worse than too much risk is to have the downside of that risk thrust upon the wrong people. In the case of the US banking system, the bankers got the upside (massive bonuses during profitable years), and the American people faced the downside (remember that bailout on taxpayer funds?). Dodd plans to stop this by curtailing the risk bankers can take in the first place.

Another important thing that Dodd would like to do is create additional oversight for banks. Senator Dodd wants to have a Financial Stability Oversight Council, designed to monitor systematic risk in the economy and within the banking system. This would create a set of “financial police officers” to ensure that banks are not getting out of line. Even more interesting is that Dodd is advocating for a new process of dismantling banks slowly, but surely, rather than allowing them to hold the rest of the economy hostage.

The area most likely to affect African-Americans is the creation of an independent Consumer Financial Protection Bureau. Such an entity might help us to avoid the predatory lending debacle led by Wells Fargo and other companies accused of selling bad loans to consumers. Consumer protection is an important governmental responsibility and it was neglected during the last decade. My own grandfather was a victim of predatory lending, which cost him the house he’d lived in for forty years.

Reforming the financial system is not going to be nearly as difficult as health care reform. The last thing Republicans want to do is to be seen as the party that is defending the bankers who caused the economic crisis. Republicans will still resist, however, claiming that they also want financial reform, but that the Democrats are doing it wrong. I imagine that their support from the American people will not be nearly as great as it was when Sarah Palin fought health care reform by telling the Tea Baggers about death panels. The passionate outcry just won’t be as great, so Dodd will achieve his victory.

Dr. Boyce Watkins is the founder of the Your Black World Coalition and the initiator of the National Conversation on Race. For more information, please visit BoyceWatkins.com>