Obama administration moves to create financial product watchdog

The administration of U.S. President Barack Obama will send legislation to Congress to create a consumer financial-products agency, Treasury Secretary Timothy Geithner said Thursday.

Following a meeting with the president's working group on financial markets, Geithner told reporters the administration was moving quickly to get the measure through Congress and to promote better co-ordination among regulators.

Among many proposals aimed at avoiding a repeat of the worst economic crisis to hit the U.S. in seven decades, the administration is calling for the creation of a new agency to oversee various types of financial products provided to consumers, from mortgages to credit cards.

Stops short of consolidating regulators

The idea for a consumer agency has generated sizable opposition from the financial industry, which argues that it would stifle development of new products. But the proposal is supported by the Democratic chairmen of two key committees, House finance committee chairman Barney Frank and Senate banking committee chairman Christopher Dodd.

Frank said his committee would begin reviewing legislation to create the Consumer Protection Financial Agency.

Geithner signalled that the administration is pressing for quick movement, saying it would "provide within the next few days" proposed legislative language to set up the consumer agency.

The administration has not gone as far as some had urged in consolidating key regulatory agencies such as the Federal Reserve, Securities and Exchange Commission, Commodity Futures Trading Commission, Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency into a single regulator. But the White House's proposal will call for merging the functions of the Office of Thrift Supervision into the comptroller's office.