The Associated Press

WASHINGTON (AP) -Two senators are pushing legislation that would give the Federal Deposit Insurance Corp. unilateral power to dismantle bank holding companies on the brink of collapse but not take them over on behalf of the government.

A bill introduced Thursday by Sens. Mark Warner, D-Va., and Bob Corker, R-Tenn., suggests that rank-and-file members in Congress want a chance to weigh in on what will become the biggest overhaul to financial regulations since the 1930s.

It also suggests a sense of urgency among lawmakers to fix a failed regulatory framework as more bank failures remain a possibility even as the economy shows signs of struggling back to health.

"The calendar is slipping and the fact of the matter is, we're still not out of the woods yet," Corker said in an interview.

The FDIC already can dismantle banks and the deposit-taking subsidiaries of bank holding companies. But it has been powerless when it comes to safely winding down the rest of a bank holding company, even if its failure could devastate the economy.

The Obama administration has recommended expanding the FDIC's power to allow the agency, with the president's blessing, to put a bank-holding company in conservatorship an arrangement similar to the government takeover of mortgage buyers Freddie Mac and Fannie Mae.

Warner and Corker's measure would allow the FDIC only to liquidate firms.

Corker said this approach would prevent the government from taking over and propping up financial institutions, exposing taxpayers to the possibility of having to foot the bill. The FDIC funds most of its activities by collecting premiums from banks for insuring their deposits.

Corker and others want to end the "too-big-to-fail" approach that regulators adopted in rushing in with government funds to rescue several large institutions in the heat of the last year's financial meltdown.

Paving the way for more bailouts "is not well received by members of any party," Corker said.

Sheila Bair has asked Congress for immediate authority for the FDIC to take over and resolve bank holding companies. She has received a sympathetic response from several lawmakers, who approve of Bair's approaches and the FDIC's activities during the financial tumult while being openly distrustful of the Federal Reserve.

Scores of bank holding companies, such as Citigroup Inc. and Bank of America Corp., now fall under the Federal Reserve's supervision.

AP Business Writer Marcy Gordon contributed to this report.