Senate Banking Committee Chairman Chris Dodd has announced he wants to pass legislation making major changes in lending laws during a lame duck session next month. But the lead witness at Dodd’s Oct. 16 hearing on the financial crisis, former SEC Chairman Arthur Levitt, recently said “not so fast.”

At the end of April, Levitt and two other former SEC Chairmen published an op ed in the New York Times questioning Treasury Secretary Henry Paulson ‘s proposals for reform of the SEC. Rather than pushing their own specific reform proposal, the trio suggested that a Commission to review the entire financial regulatory structure was needed:

“We are not advocating a preservation of the status quo. The only thing constant in our global economy is change, and to keep pace with the capital markets and needs of investors, our regulators too must change. But before we embark on a radical restructuring of the financial regulatory system, we must understand clearly where the current problems lie, what was and was not done by regulators leading up to the current crisis, and whether new powers are needed to keep pace with financial innovation.”

Levitt repeated his proposal in a May hearing before the Senate Banking Committee. Heritage President Ed Feulner recently weighed in with a similar proposal.

The tag on Dodd’s hearing is “The Genesis of the Current Economic Crisis.” Dodd is on the right track in beginning by getting an understanding of the problem. It is unfortunate if he has already made up his mind about the solution. Perhaps Dodd or other Senators should ask Levitt whether legislating in haste is the best idea, or whether Congress should act in its lame duck session to put a Commission to work “before we embark on a radical restructuring of the financial regulatory system.”