UPDATE 1-FDIC's Bair sees consensus on 'too big to fail'

* Bair says ending "too big to fail" becoming priority

* Wants bank regulators to have a say in consumer agency

CHICAGO, Oct 26 (Reuters) - Key officials and lawmakers are
reaching a "growing consensus" on the need for a strong
mechanism that would allow the government to dismantle troubled
financial giants, the chairman of the Federal Deposit Insurance
Corp said on Monday.

Sheila Bair said administration officials, top bank
regulators and lawmakers all agree that so-called resolution
authority needs to be a priority so financial firms do not take
on excessive risk, thinking the government will save them.

"We need to end 'too big to fail,'" Bair said in remarks to
the American Bankers Association annual convention.

The Obama administration plans to send new language to
lawmakers shortly on resolution authority, which is seen as a
potential deterrent to banks growing too big and complex.

The new draft bill is expected to take a tougher stance
toward troubled financial firms than the administration's
original plan, and may remove some language that would allow
for temporary bailouts.

The strategy would make it easier for the government to
oust managers, wipe out shareholders and restructure the firm's
outstanding loans, an administration official said.

Bair also said she wants bank regulators to have input in
the proposed Consumer Financial Protection Agency, which would
have broad power to protect consumers from risky financial
products such as high-interest mortgages and credit cards with
excessive fees.

"I'm hoping that bank regulators can have some say in those
rules," Bair said.

The CFPA, as proposed, would have the power to write and
enforce rules for both banks and nonbanks that provide
financial services. It would strip the current bank regulators
of their consumer protection roles, which Bair has opposed.
(Reporting by Karey Wutkowski, editing by Matthew Lewis)