Obama may compromise on consumer agency to pass financial regulation

http://www.washingtonpost.com/wp-dyn/content/article/2010/02/24/AR2010022405573.html

Obama once again has shown, that he is a made up of nothing more substantial than hot air


The Obama administration is no longer insisting on the creation of a stand-alone consumer protection agency as a central element of the plan to remake regulation of the financial system.


In hopes of quick congressional approval of a reform bill, White House officials are opening the door to compromise with lawmakers concerned about creating a new bureaucracy, according to congressional and some administration sources.

President Obama's economic team is now open to housing the consumer regulator inside another agency, such as the Treasury Department, though they still prefer a stand-alone agency. In either case, they are insisting on a regulator with political autonomy and real teeth so it can effectively enforce rules designed to protect consumers of mortgages, credit cards and other financial products.

The administration may also have to compromise on Obama's recent proposal for a rule to limit risky activities at banks by prohibiting them from engaging in many kinds of speculative investments.

Wall Street Critic Inspired New Consumer-Protection Agency

http://online.wsj.com/article/SB124545888032233137.html


Harvard University law professor Elizabeth Warren dined for three hours with White House economic adviser Lawrence Summers two months ago, and discussed over curry her idea for an agency to protect consumers from bad financial products.

This past week, President Barack Obama announced his plan to create a Consumer Financial Protection Agency, endorsing Ms. Warren's idea and causing an uproar in the financial-services industry.

Ms. Warren, for years a scourge of Wall Street, has emerged as an influential force in the administration's overhaul of financial regulations. The White House said the agency she helped inspire would strengthen consumer protection in areas including credit cards, mortgages and other financial products. If approved by Congress, it would be able to write new rules governing how products can be sold.