Nov. 4 (Bloomberg) -- Senate Banking Committee Chairman Christopher Dodd said he will unveil legislation next week to overhaul regulation of U.S. financial markets without Republican support after failing to reach a compromise.

“I’ve certainly been reaching out, and they know that, to try to develop a consensus bill,” Dodd, a Connecticut Democrat, told reporters today in Washington. “My intention is to go forward. This is an area that demands our attention.”

Dodd said his committee will meet in the coming weeks to consider changes in the draft measure and then vote. He said he will include the Obama administration’s plan to create a Consumer Financial Protection Agency, which Republicans oppose. He declined to offer other details about his legislation.

President Barack Obama is pressing Congress to pass sweeping changes in Wall Street oversight to rein in excessive risk-taking by banks and bolster regulators to prevent future financial crises. The House Financial Services Committee has approved several measures rewriting rules for Wall Street.

Senator Richard Shelby, the banking committee’s top Republican, opposes a standalone consumer agency, which is a priority for Dodd and the administration. The agency would police banks for abuses in mortgage and credit-card lending.

“I can’t imagine us finishing up a bill and completely disregarding the American consumer of financial services,” Dodd said. “They need to be heard in this debate as well.”

Dodd is “very hopeful” for a compromise with Republicans. “Shelby and I have a good working relationship,” Dodd said.

Shelby Support

Shelby, of Alabama, today said he could support a consumer agency if it is part of a bank regulatory agency, rather than a separate entity.

“That would be something we could discuss very positively,” Shelby told reporters in Washington. A separate agency is “a dangerous thing for safety and soundness.”

Dodd said he hopes the committee will complete work by December, sending the measure to the full Senate where the leadership must find time for debate. The president has sought to pass legislation by the end of this year.

“There’s still a very good chance we’ll be done with it this year,” Dodd said.

Senate Democrats have enough votes to pass the legislation without Republican support, although Dodd said “obviously that’s a difficult needle to thread.”

House Financial Services Committee Chairman Barney Frank said yesterday he expects the full House to vote on his regulatory overhaul package next month. Frank’s panel approved legislation to create a consumer agency last month.

Frank’s committee today began debating legislation to create a council of regulators to monitor the economy for systemic risk and give the Federal Deposit Insurance Corp. power to liquidate failing firms that would disrupt the economy if allowed to collapse in bankruptcy.

To contact the reporter on this story: Alison Vekshin in Washington at avekshin@bloomberg.net.

Last Updated: November 4, 2009 18:06 EST