WRAPUP 1-Financial reforms gain traction in U.S. Congress

* House committee drafting OTC derivatives rules

* Banker pay and bonuses expected to rise in 2009-WSJ

* House floor vote seen next month, Senate outlook unclear

By Kevin Drawbaugh

WASHINGTON, Oct 14 (Reuters) - A senior U.S. lawmaker lashed out anew over the rich pay packages awarded to executives of bailed-out banks on Wednesday, as Congress took steps to move ahead on financial regulatory reform.

More than a year after the worst financial crisis in decades, the House Financial Services Committee is expected to vote this week on new rules to police the $450 trillion over-the-counter derivatives market and on an Obama administration proposal to form a new consumer financial watchdog agency.

Pro-reform Democrats clashed with Republicans allied with bank lobbyists at a Financial Services Committee working session on policing the OTC derivatives market.

The largely unregulated OTC derivatives market, which includes the credit default swaps used to bet on whether a company will default on its bonds, has been blamed in part for amplifying the financial crisis last year.

Congress also will soon probe executive pay at firms that got taxpayer bailouts, such as American International Group (AIG.N) and Bank of America (BAC.N) , the chairman of the House Oversight and Government Reform Committee said on Wednesday.

"What infuriates people is when bosses at bailed out companies ... continue to rake in millions," the committee chairman, Edolphus Towns, said at a hearing to examine AIG's bonuses. "It doesn't seem right that the people who caused this tragedy should be so richly rewarded."

A year after U.S. taxpayers committed hundreds of billions of dollars to bailing out banks, big banks and securities firms were on track to pay employees $140 billion in total pay and benefits this year, The Wall Street Journal said.

That would be about 20 percent more than last year for employees at 23 top U.S. investment banks, hedge funds, asset managers and stock and commodities exchanges, the newspaper said, citing an analysis of securities filings for the first half of 2009 and revenue estimates through year-end.

The House has approved a bill to impose new curbs on banker pay, but the Senate has not yet taken it up.

President Barack Obama is pushing for quick action on financial reform to respond to public anger about huge bank bailouts and bankers' pay, and before momentum fades to reform the system in a bid to prevent another crisis in the future.

While the full House of Representatives was expected to vote on a comprehensive bill next month, the Senate has moved more slowly as it has wrestled with healthcare reform.

Treasury Secretary Timothy Geithner, speaking on Tuesday ahead of the working session in the House Financial Services Committee, chaired by Barney Frank, said, "I just want to underscore how important it is, how pleased we are that Chairman Frank is moving forward."