WASHINGTON (Reuters) - The Obama administration is still fighting for a single, independent consumer financial protection agency, U.S. Treasury Secretary Timothy Geithner said on Monday as lawmakers haggled over a financial reform bill.
Geithner seized upon the implementation of new rules under a credit card reform bill signed into law last year to argue that more such protections were needed for consumers.
“We continue to work on strengthening consumer protections and disclosure for a wide array of financial products,” Geithner said in a prepared statement.
“As we work with Congress on broader reform to make our financial system safer and more stable, we are also working to consolidate the fragmented authority of seven separate agencies into a single, independent and accountable Consumer Financial Protection Agency,” he added.
The Obama administration has regarded the new consumer agency as the centerpiece of its reform efforts, partly because existing regulators failed to prevent abuses in home mortgages that allowed a devastating housing bubble to develop earlier this decade.
Senator Christopher Dodd, the Connecticut Democrat who heads the Senate Banking Committee, and Tennessee Republican Senator Bob Corker, this week were expected to unveil a revamped bill to reform the financial sector.
The biggest sticking point for Republicans has been the proposed creation of the new consumer agency, which would strip such protection authorities from seven existing regulators and consolidate them in the hands of a new, single agency. The agency would be created by a House of Representatives version of the reform bill.
Although Corker has said he would rule out a stand-alone agency, he would consider anew consumer protection powers within a larger regulator — a compromise that Democrats have discussed.
Geithner said the implementation of the credit card act, signed into law nearly a year ago, would give American families “clear, fair rules of the road that will help them understand what they are getting into when they sign up for a card and how much they pay to use it.”
The credit card act prohibits use of unfair retroactive rate hikes and “fee traps” for late fees and over-limit fees.
Reporting by David Lawder; Editing by Andrew Hay